ESG
Environmental, Social, Governance
ESG embodies a set of principles that shape a company’s operations and ethics. It is essentially about how businesses incorporate environmental, social, and governance factors into their strategies and daily activities.
By adopting ESG standards, companies can ensure responsible corporate behavior, uphold employee rights, prevent exploitation, and minimize their environmental footprint, even if their primary aim isn't to make a positive social or environmental impact.
For each ESG aspect, a company sets specific goals to enhance its practices and tracks progress using well-defined metrics.
Following ESG demonstrates your commitment to sustainability - a key value for many customers, investors, and top talent today. As the Harvard Business Review states, "Startups Need an ESG Strategy" to remain competitive.
Why is ESG Important?
Business Value
Companies with strong ESG practices are more successful and resilient than those that ignore such issues.
Risk Management
Adopting ESG criteria enables your investors to more effectively manage risks, including those related to climate and governance.
Customer Demand
Highlighting your commitment to core values boosts your brands reputation and resilience, driving customer interest.
Investment
Socially responsible investments (SRIs) bolster enterprise growth. Investment in ESG-compliant companies is rapidly increasing globally, now considered standard.
Regulation
Global regulations are increasingly mandating adherence to specific ESG criteria for both you and your investors.
Be the change you want to see in the world
How to Get Started with ESG Strategy
Environmental
Environmental criteria are used to evaluate how an enterprise performs on natural environmental issues. For instance, using energy efficiently and managing waste responsibly.
Social
Social criteria examine how an enterprise manages relationships with employees, suppliers, customers, and the communities where it operates. For instance, diversity and inclusion policies and healthy working conditions.
Governance
Governance criteria are used to evaluate how an organization addresses corruption and ensures sustainable operations. This includes aspects such as leadership, executive pay, audits, internal control, and shareholder rights.
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Greenhouse gas emissions
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Resource Usage
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Waste and pollution
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Biodiversity
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Carbon footprint
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Employee relations
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Human rights
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Supply chain management
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Diversity and inclusion
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Health, safety and privacy
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Board composition
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Executive compensation
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Shareholder rights
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Transparency
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Ethical standards
Useful Toolkits
A detailed guide for building an ESG strategy for startups. It covers the importance of ESG, where to begin and prioritize, and how to establish and operationalize ESG practices within a small, fast-growing business.
The Tech Zero toolkit demystifies climate jargon and simplifies the process for companies to set a net zero target. It explains how to track and reduce both your direct and indirect emissions.
Pitango's Guide to ESG and Impact for Startups includes relevant resources for each topic, downloadable templates for your use, and inspiring examples from other organizations.
What are Current ESG Related Regulations I Should Know About?
In general, most regulations are directed towards investors and corporations rather than ventures. However, it is beneficial to familiarize yourself with the following regulations: