What is my ESG score, and why is it important?

Discover the importance of your ESG score and how it can help you make a positive impact on the world!

Sustainability is one of the most important things for a company to have in this day and age. If they have it, it can provide immense value. If companies don’t have it, it can negatively impact the customers they get, their investment, and the quality of potential employees wanting to work for a company.

One of the common terms that you may have come across when it comes to sustainability is ESG. We often get people asking us: But what is my ESG score, and why is it important?

Find out the answer to questions such as what is my ESG score and why having a quality environmental, social and governance strategy is important below.

What is an ESG score? The Definition

So, you’re probably thinking, what is my ESG score? First, let’s go into more detail about what an ESG score is.

An ESG score is a rating system that evaluates a company’s environmental, social, and governance strategies and practices. In short, it helps people see beyond a simple balance sheet and into the heart and soul of a company and whether it cares about the planet, its employees and its community (or if it is just interested in profits).

As such, companies with higher ESG scores tend to be on the more socially responsible and environmentally friendly side, which is why this score is great to know.

Also, it makes sense as to why investors care about ESG scores, as recent studies have shown that 66% of global consumers are happy to pay more for sustainable products.

What Exactly Do They Measure?

Overall, an ESG score has several factors that contribute to the overall score. So, let’s go through each section as we explain what specifically they measure.

Environmental

The ‘E’ in ESG stands for environmental. This measures a company’s impact on the world, from greenhouse gas emissions to resource depletion. In short, it helps you understand the eco-footprint of a specific company.

Carbon emissions, water sourcing, biodiversity, toxic emissions and packaging materials are the majority of environmental issues that are covered when ESG scores analyse the environmental aspect of things.

Nowadays, one of the biggest environmental issues is air pollution. As such, air quality is a big factor that ESG scores measure, making sure that companies aren’t actively polluting the environment and keeping the air around them clean.

Social

The ‘S’ in ESG stands for social. This measures a company’s overall impact on society. This looks at things like how the business treats employees, how it impacts l