A growing buzzword across multiple industries, companies are looking to promote their own ESG goals and awareness. But what does ESG even mean?
ESG stands for Environment, Social and Governance. The word refers to a method of incorporating environmental, social, and governance goals into a company's fundamental business strategy and operations. As the financial services sector increasingly depends on ESG ratings to impact their investments, ESG has acquired major traction.
Companies that include ESG into their business strategies, according to proponents, are stronger and less hazardous long-term bets. Companies use ESG principles to influence their operations and satisfy their corporate social responsibility objectives in practice.
Multiple factors play a role in ESG's ascent from buzzword to action item for companies in the electronics industry. One reason why ESG has become a focal point for companies is COVID. The pandemic and its effects have led to a further emphasis on specific ESG issues from investors, including: employee health and safety, diversity and inclusion, and climate change.
Speaking of investors, many investment firms like Bloomberg, BlackRock, and Vanguard have placed a greater emphasis on investing in ESG-heavy portfolios that include companies with good ESG ratings. After all, ESG funds outperformed non-ESG funds in 2020. Money is the motivator. If emphasizing ESG goals makes a company more lucrative, they're going to do so.
In fact, many organizations now require companies to have positive ESG goals in place before they even consider conducting business with them. New ESG ratings continue to emerge from various outlets, making it easier than ever for organizations to assess other companies' progress in ESG pursuits.
Cleaner air, happier employees, and a fairer work environment are just a few examples of common ESG goals set by successful enterprises.
As an example, Apple published a 64-page report on its ESG initiatives. A look at some of their ESG goals provides a useful example in identifying what ESG goals are, as a whole.
These goals set by Apple show how companies utilize ESG to promote their own growth and initiatives.
Z2Data’s integrated platform is a holistic data-driven supply chain risk management solution, bringing data intelligence for your engineering, sourcing, supply chain and compliance management, ESG strategist, and business leadership. Enabling intelligent business decisions so you can make rapid strategic decisions to manage and mitigate supply chain risk in a volatile global marketplace and build resiliency and sustainability into your operational DNA.
Our proprietary technology augmented with human and artificial Intelligence (Ai) fuels essential data, impactful analytics, and market insight in a flexible platform with built-in collaboration tools that integrates into your workflow.