The “E” in ESG refers to a company’s impact on the natural environment. This includes issues such as greenhouse gas emissions, resource consumption, waste management, biodiversity protection, and efforts to combat climate change.
The “S” covers a company’s impact on society and its relationships with employees, suppliers, customers, and the local community. Key topics include working conditions, gender equality, human rights, employee health and safety, and community engagement.
The “G” focuses on how a company is managed — including board structure, transparency, business ethics, and executive compensation policies. It also evaluates how the company handles risk, corruption, and conflicts of interest.
ESG has become a crucial factor in the investment process. More and more investors, funds, and businesses are prioritizing responsible investments — those that consider not only financial returns but also long-term impacts on the environment, society, and corporate governance. ESG offers a more holistic view of a company’s value and long-term potential.
ESG is short for Environmental, Social, and Governance — a trio of non-financial criteria used to assess companies based not only on their profits, but also on how they interact with the world around them. Over the past few decades, ESG has become a fundamental tool for investors, regulators, and stakeholders seeking to make sustainable, values-driven decisions.
The concept of ESG emerged from the broader movement of responsible investing, which gained traction in the 1970s and 1980s. Initially, investors focused primarily on financial performance. But growing environmental awareness, combined with increased attention to human rights and corporate responsibility, led to the development of a more comprehensive approach.
The 1990s saw the publication of the first sustainability reports. In 2006, the Principles for Responsible Investment (PRI) were launched — a major milestone in promoting ESG standards globally. Since then, ESG has evolved from a niche consideration to a mainstream element of investment analysis worldwide.
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Aspekt środowiskowy w ESG odnosi się do sposobu, w jaki działalność firmy wpływa na środowisko nThe environmental aspect of ESG refers to how a company’s operations affect the natural environment. In an era of growing challenges such as climate change and pollution, corporate environmental responsibility has become increasingly important. Companies are evaluated based on:
Reducing carbon dioxide (CO₂) and other greenhouse gas emissions is a top priority, especially for high-impact industries like energy, transportation, and heavy industry. Many companies are implementing strategies aimed at achieving carbon neutrality.
More and more companies are implementing sustainable practices to minimize their environmental footprint. Examples include:
Unilever – This global consumer goods company launched the Sustainable Living Plan, which includes initiatives to cut CO₂ emissions and improve energy efficiency across its supply chain.
Patagonia – This well-known apparel brand focuses on recycling and offers clothing repair programs. These efforts extend product life and reduce textile waste.
Tesla – The electric vehicle manufacturer not only promotes zero-emission transportation but also invests in renewable energy and energy storage solutions.
Both global and local regulations are being introduced to reduce the negative environmental impact of business activities. Examples include:
EU Taxonomy – A classification framework that defines which economic activities can be considered environmentally sustainable and aligned with climate goals.
The Paris Agreement (2015) – An international treaty aimed at limiting global warming to well below 2°C, with efforts to keep it under 1.5°C.
EU emissions directives – The European Union has implemented various regulations to cut emissions, such as the Emissions Trading System (ETS) and energy efficiency directives.
