Understanding ESG: The Importance of Sustainable and Ethical Investments (Full Transcript)

Speaker 1: Put your money on ESG. Environmental, Social, and Governance, also called ESG, is a term used to represent the sustainable and ethical impacts of a company's corporate financial interests. While ethical, sustainable, and corporate governance are considered non-financial performance indicators, their role is to ensure accountability and systems to manage a corporation's impact, such as its carbon footprint, or efforts towards diversity and inclusion. We'll cover what each ESG criteria entails, but you can read more about how CEOs are prioritizing sustainability by clicking the link above or in the description below. Each principle of ESG plays an integral role in the effort to increase focus on sustainable and ethical investments. Environmental factors focus on how much an organization considers the protection of natural resources. Examples include climate change, biodiversity, energy performance, air and water quality, and natural resource depletion. Social factors address how an organization treats people. Examples include global and local community relations, customer satisfaction, employee diversity equity and inclusion, employee engagement and relations, human rights and labor standards, and efforts to fund projects or institutions that will help poor and underserved communities. Governance factors examine how a corporation polices itself, with a focus on internal system controls and practices to maintain compliance. Examples include company leadership, board composition, including diversity and structure, whistleblower programs, executive compensation and policies, tax strategy, including audit committee structure, internal controls, and regulatory policies, and donations and political lobbying. Do you consider ESG criteria or sustainability when making purchases or investment decisions? Leave your thoughts in the comments below, and be sure to like and subscribe too.