What is ESG?
Ingrid WeijerMay 18, 2021
On the topic of sustainability alone, there are many: “CSR”, “extra-financial”, “ethical sourcing”, “eco-products”, “green chemistry” to name a few. But the term ESG (Environment, Social & Governance) has become widely accepted in recent years.
So, what does ESG mean?
ESG refers to the three elements by which the impact of a company on society and the environment are measured. The analysis of these three criteria has become a standard way to determine the future performance of companies, ie: to estimate the return and risk of an investment.
In this sense ESG is not the same as CSR (Corporate Social Responsibility): while CSR aims to make a business accountable for its efforts, ESG allows those efforts to be measurable.
ESG stands for Environment, Social & Governance
But what does it really mean? Here's what each word means, and what it measures:
Environment: Waste, pollution, resource depletion, deforestation, climate change & greenhouse gas emission, water use, etc...
Social: Working conditions, employee relations, diversity, local communities, health and safety, security, etc...
Governance: Share holder rights, board diversity, executive remuneration, donations, corruption and bribery, risk management, etc...
The use of ESG in public companies has, naturally, led to rankings. ESG scorecards and rating systems have been developed and companies report on these in order to compare themselves with peers and thereby attract investment. These scores can be based on criteria that are important for the company, like how it treats its employees, how it is reacting to the climate crisis, or how it manages community relations.
Stahl uses ESG to quantify projects being implemented throughout the company that are focused on social and environmental responsibility. This progress is documented in the annual Stahl ESG Report (see here the 2021 ESG Report). Information and hard data on a wide range of topics is disclosed in this report, like worker safety, climate change, sustainable development, employee diversity & inclusion, human rights, education & training, and innovation. It’s is a good, practical, example of how ESG is used in a chemical company.
Stahl never forgets that we are a business, providing products and services to customers who pay for them. But we also know that success and sustainability go hand in hand. That’s why we are committed to measuring and reporting on our progress, so that wise decisions can be made for the company, and for the industry. In the end, ESG is about measuring, which is always good business.
Not done learning about ESG?
Why not read Stahl's latest ESG report and discover how Stahl is helping formulate the future in our new ESG report.
Are you looking for more information?
Please get in touch with your relevant contact within Stahl: