ESG Overview
Recommended steps
Description
Environmental risks created by companies have a potentially negative impact on air, soil, water, ecosystems and human health. The environmental activities of companies considered as ESG factors include the prevention of ecosystem pollution, the reduction of emissions and climate impacts, or the disclosure of environmental impact information. Positive environmental impacts include avoiding or minimizing environmental risks, reducing costs and increasing profitability by increasing energy efficiency and reducing regulatory, litigation and reputational risks.
Recommendation
Consider reducing your carbon footprint by replacing light bulbs, recycling waste, and limiting the release of hazardous substances into nature.
Description
Social risks relate to the negative effects that companies can have on the general public. These risks are prevented by the company’s various social activities, such as promoting health and safety, promoting good relations in the workplace, protecting human rights and focusing on product integrity. The positive consequences of these measures include increasing the productivity and morale of employees and increasing client loyalty.
Recommendation
Focus on ensuring gender diversity, involving local communities and educating employees.
Description
Governance risks relate to the way companies are run. They focus on areas such as corporate risk management, corporate policy and, for example, executive remuneration. Increasing the diversity and accountability of the Board of Directors, protecting shareholders and their rights, and regular reporting and disclosure are offered as risk management solutions. The positive consequences of risk management include reconciling the interests of shareholders and management and avoiding unpleasant financial surprises.
Recommendation
Timely reporting to government offices, transparent internal regulations and capital structure taking into account the longer term horizon.
