Framework for implementing environmental, social and governance (ESG) principles

 What is ESG?

Environmental, Social and Governance (ESG) is a strategic and operational framework that aims to assist organizations, of any size and type, to implement and report on their activities, products, services and commitment to support the achievement of sustainable development, social justice and good governance. Adopting ESG brings a clearer focus on an organization’s impacts on the environment and society, including contribution to the delivery of the United Nations (UN) Sustainable Development Goals (SDGs)^[1], as well as evaluating the impacts of the environment and society on the organization.

ESG is distinctive for organizations partly because it focuses the attention of decision-makers on the impacts and accountability of organizations with respect to communities, the environment and everyday lives. Regulatory bodies, policy makers and investors are particularly interested in ESG for this precise reason, and because everyone has the potential to be an interested party in the outcomes of ESG activities.

Being open, honest and factual about all aspects of the organization is a positive ESG trait which underpins good governance (the “G” of ESG) that takes full account of the direct and indirect, individual and collective end-outcomes of organizations’ activities, products and services and has regard for external influences, regardless of their source, type, size or jurisdiction, including their supply chains and customers.

ESG involves accurate and regular reporting of financial and non-financial material impacts, but ESG is not just about reporting. The focus of this document is deliberately on the implementing and embedding of ESG practices and values throughout an organization’s culture and activities.

EXAMPLE 1

ESG can include:

• — Environmental (E): climate change mitigation and adaptation, sustainable resource use and energy efficiencies, circular economy, prevention of pollution and waste management, protection of the environment, biodiversity and restoration of natural habitats.
• — Social (S): internal and external social factors and impacts, including human rights, labour practice, decent work, consumer issues, community relations and engagement (including involvement in, influencing and embedding the organization’s ESG activities), privacy and data protection, health, well-being and safety, supply chain management, other human capital and social justice issues.
• — Governance (G) of the organization, including the governing of the environmental (E) and social (S) categories: corporate board composition and structure, strategic sustainability oversight and compliance, executive compensation, anti-corruption, responsible political involvement, fair competition, promoting social responsibility in the value chain, respect for property rights and interrelationship with communities and society.

ESG draws on and supports the UN SDGs^[1] to help define positive social and environmental outcomes. Furthermore, ESG can be considered as connected to and convergent with sustainable development.

source :

https://www.iso.org/obp/ui/en/#iso:std:iso:iwa:48:ed-1:v1:en