ESG Metrics

ESG metrics are quantitative and qualitative indicators used to evaluate a company's performance in three key areas: Environmental, Social, and Governance. These metrics provide insights into how well a company manages sustainability-related risks and opportunities, helping stakeholders, including investors, regulators, and customers, to assess a company's long-term viability and corporate responsibility.

Key ESG metrics include:

• Environmental Metrics: Measuring a company's impact on the environment, including carbon emissions, water usage, waste management, and energy efficiency.
• Social Metrics: Evaluating a company's relationships with employees, customers, and communities, including diversity and inclusion, employee satisfaction, and human rights practices.
• Governance Metrics: Assessing a company's leadership structure, business ethics, executive compensation, and transparency in decision-making processes.

ESG metrics are becoming increasingly important as businesses are held accountable for their sustainability efforts and as investors seek to align their portfolios with responsible business practices.

Source(s):

• Finance Alliance. (2023). ESG metrics: How to drive sustainable business success.
• Corporate Finance Institute (CFI). (n.d.). ESG (Environmental, Social, & Governance).

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• Corporate Sustainability Reporting Directive (CSRD)
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• ESG