What is ESG | What County

What is ESG

What does ESG mean?

Environmental Social Governance – ESG (in German: Umwelt, Soziales und Unternehmensführung) is used as a broad term for CSR (Corporate Social Responsibility). This is the evaluation of corporate social responsibility. In other words, the voluntary contribution of the economy to sustainable development, which goes beyond the legal requirements.

What is ESG
What is ESG

ESG can therefore also be seen in the context of overarching corporate governance or as part of the topic of corporate governance and sustainability.

In summary, corporate social responsibility describes responsible, entrepreneurial action that integrates social and environmental concerns on a voluntary basis in its business activities and in its interactions with interest groups and beneficiaries. Ideally, this is also linked to a responsible entrepreneurial attitude in the investments made, a “socially responsible investing”.

An important factor in this is the environment in which the company being assessed operates. Environment or environmental protection measured by criteria such as CO2 emissions, the share of renewable energies, environmental management or compliance with environmental guidelines, for example, plays a greater role in the energy sector than in the service sector. Here, the social criteria such as human capital, product liability, collective agreements, compliance with anti-discrimination guidelines, freedom of assembly or the staff turnover rate predominate.

In all sectors, however, the quality of corporate governance and thus (corporate) governance should be taken into account in the sustainability assessment.

Concrete aspects include guidelines for the prevention of corruption, bribery and money laundering, independence of the Board, programs for internal whistleblowers (“whistleblowers”) or the signing and compliance with sustainability standards of internationally recognized institutions such as the “UN Principles for Resposible Investing” (UN PRI) of the United Nations.

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