Is ESG good for business?

Is ESG good for business?

ESG stands for environmental, social, and governance factors. As ESG, or environmental, social and governance factors, gain more attention among businesses large and small, the question of whether ESG is good for business remains in the air. ESG initiatives were once reserved for nonprofit organizations; today they are widely implemented by both for-profits and nonprofits alike. ESG considerations help companies create a positive impact on society (and vice versa).

The link between ESG and business has not yet been substantiated across all industries, but studies show that ESG issues do affect profitability. The relationship between ESG concerns and shareholder value can be seen in certain industries like oil & gas (concerns over water damage), utilities (concerns over energy costs) automotive (diversity hiring practices) to name a few. ESG is a complex, multifaceted issue and in all cases ESG factors should be considered with great care by both ESG experts and business leaders who have the ability to implement ESG practices within their organizations.

While ESG is often associated with environmental issues such as climate change or deforestation, ESG extends into areas that also affect people (human rights) and society (culture). Companies like Starbucks demonstrate how ESG can be applied to positively impact culture…