Three strands of ESG Three Strands of ESG The United Nations have defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs”. ESG sits underneath this and is the vehicle through which we can achieve this vision. The three strands of ESG are Environmental, Social and Governance, and a company’s ESG practices and reporting will mainly focus on the non-financial elements of their operations and performance. It is important to be aware that a company’s ESG considerations include both their direct and indirect impacts, which may be brought about through their own activities or as a result of their business relationships and supply chains. ENVIRONMENTAL This covers a company’s impact on nature, and the effect it has on the planet. This includes your greenhouse gas emissions (GHGs), effects on biodiversity, waste and use of natural resources such as freshwater. By using less resources you can cut costs, while helping preserve the planet’s natural resources. Or you can do things in a different way, perhaps using environmentally friendly materials in your production. SOCIAL The social element of ESG considers all groups of people who are affected by a company’s activities. This includes workforce, local communities, customers, as well as your supply chain. A lens on the social impact of a company will look into matters such as working conditions for employees, human rights issues, diversity, inclusion, and equal opportunities, training and development of staff, and how operations might affect local communities. By focusing on the social you can develop happier communities, more inspired workers, and improve diversity. All of these will give your organisation an edge over the competition. GOVERNMENTAL Governance can be defined as the way in which a company is controlled. It covers the purpose of a company, its policies and procedures, ethical behaviour and decision-making mechanisms. This element also includes the people who form the governing body and who are in positions of responsibility. By focusing on good Governance you can take the right decisions for all stakeholders and bring different (and more diverse) voices into the boardroom. Visit us Moore Interaudit interaudit@moore.at Strubergasse 28 A-5020 Salzburg T +43 (662) 230 845