Log in
Enquire now
ESG validation

ESG validation

Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that investors use to screen potential investments.

OverviewStructured DataIssuesContributors

Contents

Is a
Industry
Industry
Overview

Environmental, social, and governance (ESG) are tools and criteria that help companies set non-financial goals, measure performance, and make changes towards greater sustainable businesses practice. These measures are also intended to help increase transparency into a company's practices to attract consumers and investors. ESG is considered to be a part of a sustainable business model and has been suggested to have long-term benefits for a company's competitiveness, resilience, capability for scaling, resistance to commoditization, and sustainability, and to help create value for investors and stakeholders.

History

The ESG framework has been an evolution from Corporate Social Responsibility (CSR) constructs, which have since fallen into disuse. The change from the CSR framework to the ESG framework has been considered a positive change for businesses, not only for having ambitions beyond the bottom line for shareholder value and rewards, but also for developing a framework for a company to engage with a community, to demonstrate a willingness and a capability for developing sustainability, and to offer a way for a company to be held accountable.

Environmental, social, and governance framework

Framework
Concerns

Environmental

Under this framework, the concerns looked at include a company's energy efficiency, carbon footprint, water consumption, waste management, packaging, and biodiversity management.

Governance

Under this framework, the concerns considered include a company's efforts in climate change, cybersecurity, corruption and bribery, responsible taxes, compensation, and reliable financial disclosure.

Social

Under this framework, the concerns looked at include a company's employee attraction and retention, diversity and inclusion, pay equity, customer data privacy, social acceptability of projects or business, and organization culture.

ESG Validation

Most companies develop the goals and ambitions based on internal concerns or based on the demands faced by the company from investors, regulators, community stakeholders, or the boards of directors. However, validating whether a company has actually followed the ESG framework and related goals is difficult. As well, understanding if the company has considered the possible consequences, opportunities, benefits, or potential risks the policies have on the business and environment is not well understood. Validating any of these measures is difficult, and because a lot of the goals and ambitions of a company are subjective to the company, measuring them brings increased challenges.

There are companies offering ESG validations to help companies, investors, and regulatory authorities to understand whether a company is meeting the company's proposed goals, and further, to validate whether the goals the company has proposed make sense in the framework or for the industry sector the company partakes in. However, there remains no standardized framework or measurement process or approach to validate the ESG criteria. As well, some concerns exist because of the lack of an objective framework, and a lot of the validation processes tend to reflect the concerns or campaigns of the organization performing the validation.

Timeline

No Timeline data yet.

Companies in this industry

Further Resources

Title
Author
Link
Type
Date
No Further Resources data yet.

References

Find more entities like ESG validation

Use the Golden Query Tool to find similar entities by any field in the Knowledge Graph, including industry, location, and more.
Open Query Tool
Access by API
Golden Query Tool
Golden logo

Company

  • Home
  • Press & Media
  • Blog
  • Careers
  • WE'RE HIRING

Products

  • Knowledge Graph
  • Query Tool
  • Data Requests
  • Knowledge Storage
  • API
  • Pricing
  • Enterprise
  • ChatGPT Plugin

Legal

  • Terms of Service
  • Enterprise Terms of Service
  • Privacy Policy

Help

  • Help center
  • API Documentation
  • Contact Us
By using this site, you agree to our Terms of Service.