ESG
Business & Finance abbreviation · Management & Strategy
| Stands for | Environmental, social and governance |
|---|---|
| Categories | Business & Finance |
ESG stands for Environmental, social and governance, a management & strategy abbreviation.
Framework for evaluating companies on non-financial factors: environmental impact (emissions, waste, water use), social issues (labor practices, diversity, community relations) and governance (board structure, executive pay, shareholder rights). Investors use ESG ratings and disclosures to screen and price companies, and many firms publish annual ESG reports.
Example: The fund dropped the miner after its ESG score fell following a tailings-dam failure.
Usage notes
The term was popularized by "Who Cares Wins," a 2004 report backed by the UN Global Compact. ESG ratings from different providers often disagree because they weight factors differently. In the United States, ESG investing became politically contested from around 2022, and some firms shifted to terms such as "sustainability." The EU's Sustainable Finance Disclosure Regulation (SFDR) sets disclosure rules for funds marketed as sustainable.
Related abbreviations
More management & strategy abbreviations
- EOI – Expression of interest
- EOM – End of month
- EOW – End of week
- EOY – End of year
- ERM – Enterprise risk management
- ERP – Enterprise resource planning
- FMEA – Failure mode and effects analysis
- GRC – Governance, risk and compliance
- GTM – Go-to-market
- HiPPO – Highest paid person's opinion
- ITT – Invitation to tender
- JV – Joint venture