ESG Flashcards
(55 cards)
Environmental Factors
energy use
greenhouse gases
water use
pollution
waste
materials
Social Factors
labour practices
human rights
employee health and well being
diversity
equity/inclusion
impact on community and customers
Governance Factors
companys management and decision making processes
internal controls/ audits
Impact of ESG on Business
Allows business to be evaluated on factors other than just financial performance. Incorporates financial and non-financial issues involved in managing business more holistically, comprehensively, and long-term. Acknowledges that business relies on society and environment.
Planetary Boundaries
Biophysical limits in Earth systems that must not be exceeded to avoid potentially irreversible environmental damage.
Science-Based Targets
Greenhouse gas emissions reduction targets backed by climate science to meet the goals of the Paris Agreement.
Just Transition
A fair shift to sustainable energy that protects workers, jobs, and communities.
Sustainability
- Meeting the needs of the present without compromising the ability of future generations to meet their own needs.
Sustainable Development
Economic growth that also protects the environment and social well being
Green Financing
Funding or investments that support environmentally sustainable projects, such as renewable energy, energy efficiency, and pollution prevention.
Grey Financing
Financial flows toward activities and technologies that contribute significantly to GHG emissions.
Greenwashing
When a company gives a false impression of its environmental efforts or exaggerates its sustainability achievements.
Greenhushing
When companies underreport or remain silent about their sustainability actions to avoid scrutiny or backlash and the desire to avoid the spotlight until substantial results are achieved. (underreporting environmental effects)
Carbon Neutral
When a company balances out the amount of carbon dioxide it emits by removing an equivalent amount from the atmosphere.
Net-Zero
When a company reduces its greenhouse gas emissions as much as possible and offsets the remainder, aiming for no net emissions overall.
Nature Positive
Helping nature heal by doing more than just reducing harm — actually restoring and improving the environment.
Decarbonization
The process of reducing carbon dioxide emissions associated with electricity generation, transport, industrial processes, and other sectors.
Adaptation
Adjusting to the effects of climate change
Mitigation
Actions taken to reduce or prevent the emission of greenhouse gases.
Shift in Management Thinking
Shift from short-term thinking to long-term thinking (pre to post-industrial revolution).
Old Thinking – “Empty World” (Short-Term Focus):
Belief that nature had unlimited resources – “we couldn’t possibly run out.”
Businesses focused on:
-Maximizing short-term profits for shareholders.
- Businesses focused on making quick money.
-They didn’t think much about the environment or society.
-Most decisions were made in private, without thinking of the long-term effects.
New Thinking – “Full World” (Long-Term Focus):
-Now we live in a world with increasing scarcity of resources – “uh-oh…”
Businesses are starting to:
-Focus on long-term value for all stakeholders (not just shareholders).
-They want to be more open and fair when making choices.
-The goal is to create a business that is strong, fair, and sustainable for a long time.
Role of Indigenous Peoples in ESG
In the past, the role of Indigenous Peoples was ignored during and after the Industrial Revolution. Their sustainable practices and knowledge of the land were seen as unimportant by governments and industries.
But in the 21st century, there has been a shift toward reconciliation, and people are starting to realize that Indigenous knowledge is valuable for protecting ecosystems.
Now, the science and business communities are starting to listen to and include Indigenous voices in ESG planning and environmental protection.
Companies should Follow the 4 ESG Principles to make progress
Commit - Make a clear, public commitment.
Commercialize - Build ESG into the business model, not just as cost.
Get unComfortable - Challenge old ways of thinking and doing.
Cooperate - Partner with other stakeholders (government, communities, suppliers).
Identify the impact social issues have
Social issues impact customer trust and loyalty, investor confidence, and employee satisfaction
Employees care about how they are treated and care how other stakeholders are treated
Managers in every industry face a talent challenge
If employees needs aren’t met, they will leave and if they cant leave they may “quiet-quit”
Ignoring social issues
Leads to turnover, quiet quitting, and public backlash.
