ESG vs Corporate Sustainability

Understanding the Differences and Similarities Between ESG and Corporate Sustainability

• ESG and sustainability are two popular terms in the corporate world that address environmental and social aspects of a business.
• ESG sets specific criteria to define environmental, social, and governance systems as sustainable, while sustainability creates long-term stakeholder value by implementing a sustainable business strategy.
• Corporate sustainability creates a business strategy that addresses the needs of the environmental, social, and financial systems within which a business operates.
• Companies are using the ESG criteria to mitigate business risk and prepare for the future.
• Sustainability has become a buzzword for climate change mitigation, social responsibility, and using less plastic.
• CSR is a form of business regulation that guides companies to operate in a socially responsible way.
• Green is often used for branding purposes to project an Earth-tone that gives a product or service a sustainability-related appeal, but it's sometimes implicated as greenwash.
• A sustainability strategy is a prioritized set of actions that focus investment and drive performance, creating environmental, social, and economic systems that can be sustained long-term.
• ESG investing is born from the growing assumption that the financial performance of businesses is increasingly affected by environmental and social factors.
• ESG metrics are used to assess a company's exposure to a range of environmental, social, and governance risks.
• ESG frameworks are systems that standardize the reporting and disclosure of ESG metrics.
• ESG certification involves an audit to assess ESG risks and validate a business's efforts to improve ESG performance.