On this page
- What is ESG?
- Why is ESG important?
- ESG pillars
- ESG 101 guide
What is ESG?
Environmental, Social and Governance (ESG) is a comprehensive framework that looks at organizational impacts on the environment; the treatment of employees, stakeholders and community members; and addresses the quality of governance structures.
These are important factors for businesses in B.C. and go beyond economic accomplishment by creating a deeper set of considerations to support success for British Columbians—today and well into the future.
Why is ESG important?
ESG is a key consideration for investors in the province, entrepreneurs looking to launch businesses, policy makers, and consumers and community members who make personal decisions on where to live, how to invest, and what to buy. ESG matters in all of our lives.
Organizations that embrace and adhere to ESG principles contribute to long-term sustainability for their businesses and the province and build employee, investor, consumer and community trust. ESG also reduces business risk and fosters innovation—key considerations in maintaining a strong and stable economy.
ESG is made up of three key pillars:
Environmental
These factors address the impact that a business has on our natural world. This can include carbon footprints, energy efficiencies, water usage, waste management, supply chain sustainability, environmental compliance and more.
Why it matters
Business sustainability, risk management and stakeholder relationships are key considerations of the environmental pillar. Businesses committed to environmental practices are better positioned to navigate emerging challenges and build a resilient and sustainable future.
Social
This pillar addresses how a business impacts society and how it manages relationships with employees, customers or clients, its communities and others. This could include diversity and inclusion; labour practices and human rights; health and safety; employee, customer and community engagement; charitable/philanthropic commitments; supply chain practices and more. Increasingly market forces are moving towards businesses articulating a compelling social purpose, and doing so in a way that creates value not just for the business and customers but for the broader community or society itself.
Why it matters
Positive brand and organizational reputation, risk reduction, attracting capital, and fostering positive relationships with stakeholders all contribute to long-term sustainability for a company. A commitment to social responsibility better positions a business to thrive in a changing environment and to meet increasing demands for ethical and sustainable practices in business.
Governance
This area focuses on the systems and structures that a business has in place to ensure ethical behaviour, transparency and accountability. This might include shareholder rights, executive compensation, anti-corruption and bribery policies, risk management, ethical business practices, cybersecurity and compliance with laws and regulations.
Why it matters
Trust building with employees, investors, the community and others contributes to the overall sustainability, stability and ethical behaviour of a business. Businesses with strong governance are better positioned to navigate challenges, build positive relationships, and create organizational value over the long term.
ESG 101 Guide
Our detailed 101 guide is a great first step in your ESG journey. It includes:
- Defining ESG
- Why ESG matters to businesses
- Glossary of key terms
- How to implement ESG practices within your organization
