The term “ESG” stands for environmental, social, and governance principles. While individuals may understand what these letters represent, many people are looking to understand why ESG is relevant, what ESG means in practice, and how it can be incorporated into business practices to the advantage of the business. In the last several years, ESG has become a hot topic and, for many, is the new standard of excellence for businesses moving forward. These principles, at their core, provide a framework for businesses to measure the tangible impacts of these issues on their operations and bottom line, as well as the community at large. This framework expands this analysis to account for a broader group of stakeholders.

Sustainability of a business now depends on more factors than ever before. Environmental sustainability focuses on a reduction of energy and water consumption—in particular a reduction of carbon and greenhouse gas emissions—as well as an improvement in recycling and waste reduction efforts.