chinazh
Sustainable Investing Glossary

What is ESG?

ESG definition

What is the definition of ESG?  ESG means using Environmental, Social and Governance factors to evaluate companies and countries on how far advanced they are with sustainability. Once enough data has been acquired on these three metrics, they can be integrated into the investment process when deciding what equities or bonds to buy.

ESG factors: Environmental

Environmental factors include the contribution a company or government makes to climate change through greenhouse gas emissions, along with waste management and energy efficiency. Given renewed efforts to combat global warming, cutting emissions and decarbonizing is become more important.

ESG investing
ESG investing
We integrate environmental, social and governance criteria into the majority of our investment processes.
More about ESG investing

ESG factors: Social

Social include human rights, labor standards in the supply chain, any exposure to illegal child labor, and more routine issues such as adherence to workplace health and safety. A social score also rises if a company is well integrated with its local community and therefore has a ‘social license’ to operate with consent.

ESG factors: Governance

Governance refers to a set of rules or principles defining rights, responsibilities and expectations between different stakeholders in the governance of corporations. A well-defined corporate governance system can be used to balance or align interests between stakeholders and can work as a tool to support a company’s long-term strategy. 

Governance can also refer to the standard of government of nations. Robeco measures ESG levels using the the SAM Corporate Sustainability Assessment issued by S&P Global, and our Country Sustainability Ranking for governments, to give overall ESG scores. There is some crossover between the two, particularly for multinational companies.

Also read: ESG funds

How climate change and Covid-19 changed the stewardship landscape
How climate change and Covid-19 changed the stewardship landscape
The stewardship landscape evolved rapidly in 2020.
22-04-2021 | Webinar
SI Opener: Investing in health and disease prevention is the best cure
SI Opener: Investing in health and disease prevention is the best cure
Covid-19 has put the spotlight on health.
06-04-2021 | SI Opener
AI技术带来的挑战,企业准备好了吗?
AI技术带来的挑战,企业准备好了吗?
此前美国大选“舞弊”说法甚嚣尘上,这一问题引发了人们对于人工智能(AI)和社会问题的思考。
16-03-2021 | 市场观点