Environment, Social & Governance (ESG) is a term used to describe the three broad areas used to assess a company’s sustainability. ESG is becoming an increasing focus for many stakeholders as they acknowledge the material and financial impacts that ESG can have on a company’s short-, medium-, and long-term value, as well as the role of ESG in the greater systemic environment.
The growing investor demand for companies to report on ESG factors has created greater opportunity for companies to consider their sustainability and impacts, and the role of ESG reporting in presenting this information to the market.
There are a variety of global ESG frameworks available in the market to help guide companies disclose their exposure to ESG related risks and report on their ESG performance. However, the abundance of frameworks and requests for information from investors, creates confusion for industry on this already complex issue.
In addition to the many frameworks available in the market, there are a number of third-party rating agencies that measure a company’s ESG risk exposure or ESG risk management, and provide a rating or score.
In order to assist members with understanding the different ESG Frameworks and Rating Agencies available in the market, AMEC has developed several documents: