Issue link: https://resources.tangoanalytics.com/i/1508314
ESG ESG, on the other hand, focuses specifically on the environmental, social, and governance risk factors that are considered financially material to a company's performance. As a reminder, ESG refers to Environmental (water use, energy use, GHG emissions), Social (poverty, human rights, employee rights), and Governance (code of conduct, accountability, transparency, disclosure) factors. Sustainability on the whole deals with the concept of sustainable value creation at the corporation level (efficiency) and sustainable development at the system level which is concerned with preserving resources and generating value for future generations (generating positive externalities and impact). Although sustainability and ESG are widely regarded as interchangeable when it comes to reporting labels, there are nuanced differences that are good to be aware of depending on the context. Some firms may also choose specific terminology over others in reporting simply based on the message they are trying to convey to stakeholders or out of a desire to avoid any political backlash that is often directed at 'ESG' in the U.S. THE REPORTING ECOSYSTEM: End users of reporting data include investors, and other stakeholders such as civil society, communities, senior executives, employees, customers, governments, and suppliers. Regulators are also increasingly interested in sustainability information, with some moving to mandate it in accordance with standards. Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Materiality Assessment Stakeholder identification and engagement Data collection and analysis Report drafting and publishing External assurance on reporting information and data accuracy