Guides
ESG Categories
ESG stands for Environmental, Social, and Governance. It's a framework used to assess how a company or organization performs in areas beyond just financial returns. It’s become a key concept in investing, business strategy, and corporate responsibility.
Here’s a breakdown of each component:
🌱 Environmental (E) This focuses on how a company impacts (or is impacted by) the natural environment.
🤝 Social (S) This looks at how a company manages relationships with people, employees, customers, suppliers, and communities.
🏛️ Governance (G) This evaluates how a company is governed or managed.
ESG Mapping
🌱 Environment (E)
| Environment Sub-Category | Description |
|---|---|
| Animal Welfare | Violations related to the welfare of animals, including abusive treatment. |
| Atmospheric Pollution | Non-compliance or violation of laws/regulations and industry standards, leading to significant air pollution and inadvertent greenhouse gases emissions. |
| Biodiversity And Ecosystems | Actions causing harm to wildlife and plant species (including endangered species), and detrimental effects on natural ecosystems. |
| Climate Change | Misconduct in the company's climate change approach, such as inadequate climate initiatives, non-adherence to climate goals/policies, and deceptive green practices. |
| Energy & Natural Resources Management | Excessive consumption, over-exploitation, or inefficient utilization of energy and/or natural resources (excluding water). |
| Environmental Misreporting | Inaccurate or deceptive information concerning its environmental performance. |
| Food Waste | Irresponsible disposal or discarding of edible food at retail and consumer levels. |
| Industrial Accidents & Physical Risk | Incidents caused by the company that resulted in environmental damages, including industrial accidents, or damages the company has faced due to extreme weather events such as floods, droughts, hurricanes, and wildfires. |
| Land And Soil Pollution | Soil degradation and contamination. |
| Other Pollutions | Other pollutions, including Dust, noise, odor or visual that can be harmful to people and biodiversity. |
| Waste Management | Improper acquisition, handling, conveyance, or disposal of materials resulting in environmental contamination, health hazards, or compromising the overall security and well-being in an area. |
| Water Consumption | Excessive water consumption, over-exploitation, or inefficient utilization. |
| Water Pollution | Effluent discharges and water releases. |
🤝 Social (S)
| Social Sub-Category | Description |
|---|---|
| Child Labor | Working activities that endangers children's mental, physical, social or moral well-being and/or disrupts their education. |
| Community Health And Safety | Adverse effects on the well-being and safety of communities, clients, customers, or other non-complicit stakeholders, including diseases and deaths linked to corporate activities or related disasters. |
| Customer Relations | Compromising client well-being through product/service failures, including illnesses, recalls, or incidents during use, as well as issues with content moderation. |
| Diversity & Inclusion (Beyond The Workplace) | Unfair or prejudicial treatment, discrimination against individuals or groups based on race, color, sex, language, religion, political opinion, nationality, social origin, property, birth status, disability, age, marital or family status, sexual orientation, gender identity, health status, place of residence, economic or social situation. |
| Forced Labor | Forced labor, where individuals work under threat of penalty, coercion or more subtle means like debt manipulation, identity document retention or threats of reporting to immigration authorities (i.e modern slavery). |
| Freedom Of Association And Collective Bargaining | Infringement on workers' rights to organize and engage in collective bargaining, whether through formal unions or informal groups. |
| Fundamental Human Rights | Any act or neglect harming human rights, across civil, political, economic, social or cultural. |
| Occupational Health & Safety | Endangering employee well-being, such as illnesses or fatalities resulting from company operations or disasters and safety incidents due to inadequate training or maintenance measures. |
| Rights Of Indigenous Communities | Adverse effects on the livelihoods or rights of protected or Indigenous communities, encompassing participation rights and control over cultural heritage. |
| Right To Property | Land ownership disputes, such as large-scale acquisitions and forced evictions. |
| Social Misreporting | Company disseminates false or misleading information related to social data, such as fatality numbers or incidents of discrimination/harassment. |
| Violation Of Human Rights In Conflict Or High Risk Zones | Negative human rights impacts by companies in conflict zones or high-risk areas, where risks of violence or serious abuses are elevated due to factors like political instability, institutional weaknesses, or widespread violence. |
| Working Conditions | Violating rights or disregarding laws, regulations or contracts related to favorable work environments. |
| Workplace Diversity & Inclusion | Discrimination against workers based on race, age, sexual orientation or other characteristics, encompassing both sexual and non-sexual forms of harassment. |
🏛️ Governance (G)
| Governance Sub-Category | Description |
|---|---|
| Accounting And Securities Fraud | Publishing inaccurate or deceptive financial data to shareholders, investors, auditors, or regulatory bodies. This extends to deceitful activities in stock or commodities markets, including false information dissemination, stock manipulation and insider trading designed to influence investor decisions. |
| Anti-Competitive Practices | Unethical market practices, including collusion, fake transactions, and monopolization, aimed at manipulating markets. |
| Board Of Directors & Senior Management | Instances where the highest levels of corporate governance and executive leadership exhibit shortcomings or lapses in their responsibilities, resulting in adverse outcomes for the organization. |
| Corruption And Bribery | Practices involving the exchange of valuable items to sway or reward individuals in positions of power, whether to coerce specific actions or acknowledge past favors. |
| Csr Misreporting | Instances where companies provide inaccurate or misleading information about their Corporate Social Responsibility (CSR) efforts and impacts. |
| Data Privacy & Cyber Security | Breach of privacy, encompassing the unauthorized disclosure of personal information due to internal mishaps or external threats. This category also includes instances of cybersecurity lapses. |
| Embezzlement | Misappropriation of assets by an individual entrusted with them, such as the unauthorized use of funds for personal gain. |
| Executive Pay | Controversies or concerns surrounding the compensation packages and remuneration practices of top-level executives within organizations, often including aspects such as excessive compensation, lack of transparency or misalignment with company performance or stakeholder interests. |
| Fraud | Intentional deception perpetrated by an organization to unlawfully obtain property or services from another party, resulting in harm. |
| Legal And Investigative Exposure | Legal investigations, lawsuits, or prosecutions related to the company's operations, activities, or impacts on stakeholders, including regulatory actions, civil litigations, criminal charges, or other judicial proceedings. |
| Marketing & Communication | Manipulating customers through misleading tactics to drive sales, often by misrepresenting products or services. This encompasses misleading advertisements, discriminatory marketing, false health claims and using ambiguous language to exaggerate product benefits. |
| Money Laundering | Concealing the illicit origin of money, derived from activities such as drug trafficking, corruption, embezzlement or gambling by transforming it into seemingly legitimate funds. |
| Price Fixing | Unethical or illegal practices where companies collude to set prices. |
| Supply Chain | Misconduct associated with a company's sourcing practices, such as negligence or unethical behavior in procuring materials or services. |
| Tax Strategy | Tax avoidance which involves employing legal methods to minimize tax obligations, or/and tax evasion which entails unlawfully reducing taxes through deception and fraudulent practices. |
| Terrorism Financing | The act of soliciting, collecting, or providing funds with the intention of supporting terrorist acts or organizations. |