WHAT IS THE DIFFERENCE BETWEEN SUSTAINABILITY AND ESG?
Sustainability and environmental, social, and governance (ESG) are separate but related concepts referring to how a company’s work impacts the world around it.
Companies are “sustainable” when their operations and practices are designed to have a lower impact on society and the environment. Companies are addressing “ESG” when they are implementing initiatives designed to meet specific goals in the areas of environment, social impact, and governance.
SUSTAINABILITY
Sustainability is a broad term that generally focuses on balancing the three pillars of environmental, economic, and social issues and is used to describe how well a company operates in the present without compromising the ability of future generations to also meet their needs.
When a company is said to be operating ‘sustainably,’ they are working while creating an appropriate balance between making money and ensuring social and environmental wellbeing in the world.
ENVIRONMENTAL, SOCIAL, & GOVERNANCE
ESG describes a more precise framework or set of actions that companies put in place to measure and assess their non-financial performance and the impacts they have on society and the planet. ESG initiatives consist of specific, measurable goals and the processes used to meet those goals.
A company’s ESG profile and reports are used by investors, customers, employees, and other stakeholders when deciding whether to invest in, purchase from, or work within a company.
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