Place 'ESG' on your radar

In the last few years, and especially now as we emerge from the COVID-19 pandemic, the world’s economy has become increasingly values driven. Many consumers care as much or more about a company’s principles (i.e., what the company stands for) as they do about its products or services. The grouping of “environmental,” “social” and “governance” (ESG) to collectively represent an organization’s core values and principles is interesting — as you really can’t have one without the others.

A company might claim to emphasize diversity in its workforce and treat its employees, customers and communities with respect (social responsibility). But, meanwhile, it might dump waste into a river and harm the environment (environmental responsibility) with management’s full knowledge (governance). The company then is deemed unethical despite its claims of social responsibility.

All three ESG elements must come together at satisfactory levels in the public’s eye to render a company ESG-focused.