What is ESG?

ESG: What is it?

Environmental, social and corporate governance, short handed to “ESG” is a way to evaluate the operation of a business that goes beyond maximizing profit. The term came to the global lexicon in 2015 when the United Nations adopted the 17 Sustainable Development Goals, with an aim to “end poverty, protect the planet and improve the lives and prospects of everyone, everywhere.” We now know that corporations that have ESG goals in each category, reduce harm to the environmental world, support social movements, and govern with diversity, equity, and inclusion as forefronts, are more stable and profitable.

Responsible Profitability
ESG is increasingly seen as a proxy for how companies perform. From an investor perspective, 81 % of ESG indexes have outperformed the market/peer indexes. ESG reporting is key to access to capital: it helps to retain current investors and provides access to climate, sustainable and social linked finance and bonds.1

In the absence of a global law, individual sector standards have been enacted. The International Petroleum Industry Environmental Conservation Association (IPEICA) is the global oil and gas association for advancing environmental and social performance across the energy transition. In March IPIECA stakeholders met to discuss ESG reporting and transparency. Discussions focused around reporting becoming mandatory in the United States through the Security and Exchange Commission rules and that companies are lagging when it comes to evidence and data on the ‘social’ sector of ESG. Investors want to see how companies are making impactful decisions in this space. One hurdle is that Boards and CEOs are not involved enough, leaving a disconnect between goals, reporting, and implementation.

What’s next? How do we as members of the resources development industry improve in this space?

Ask! Get Curious!

The UN's "17 GOALS for Sustainable Development"

Does the company you work for currently report on these metrics? Are they preparing for when they will be required? How do they compare to others? Do your coworkers know about these goals? How are you and them helping to achieve the goals?

Want to know a little more? You can check out this overview by Forbes or this much deeper dive by the Corporate Finance Institute.

1 From the Ipieca Week 2022 stakeholder panel briefing reports, Houston, TX, March 2022

About the Author: Erin Bragg is a Project Scientist for SLR Consulting. Erin has over eight years of experience in environmental management and sustainability. She has extensive experience with public outreach and regularly works with diverse groups of stakeholders to achieve sustainability, environmental, and conservation goals. Also, she’s an avid alpine skier.

Graphics by: Owen Phillips, Velocity Editor. Please feel free to use our Infographics, but provide proper citations. "Image used via Creative Commons license courtesy Owen Phillips, Velocity"


So, you'd like to learn more.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.