ESG stands for Environmental, Social, and Governance. It refers to the three central factors in quantifying and measuring the sustainability and ethical impact of an investment in a company or business.

• Environmental criteria consider how a company performs as a steward of nature. This includes factors such as a company's energy use, waste, pollution, natural resource conservation, and treatment of animals.
• Social criteria examine how a company manages relationships with its employees, suppliers, customers, and the communities where it operates. This includes factors like diversity and inclusion, labor practices, product safety, responsible marketing, and community development.
• Governance criteria deal with a company's leadership, executive pay, audits, internal controls, data protection and shareholder rights. This includes factors such as board composition, executive compensation, political lobbying and donations, and transparency and accountability.

ESG factors are increasingly being used by investors, companies, and regulators to evaluate corporate behaviour and assess risk. By incorporating ESG considerations, investors can identify companies that are better positioned to navigate emerging sustainability-related challenges and opportunities. This can help inform investment decisions and portfolio construction.