What is ESG

Globe in hands

ESG – Environmental Social and Governance

ESG stands for Environmental, Social and Governance. This is also called sustainability in many cases. In a business context, sustainability is about the company’s business model, i.e. how its products and services contribute to sustainable development. 

It is also about a company’s risk management, i.e. how it manages its own operations to minimise negative impact. 

Below is an example of how ESG can work in practice. This film shows how a financial entity works with ESG as part of its wealth management. It also provides a good understanding of the term ESG and why it is an important factor in business decisions. 

You can also learn more in our ESG Brochure (pdf, 380 KB).

Environmental

Global production and consumption have a major impact on our environment. When producing and consuming everything from cars to food, we contribute to climate change, resource depletion, waste, pollution, deforestation and bio-diversity, to name a few examples. 

Below is an example of how factories producing medicine can severely pollute the environment, as well as how financial entities can address problems like this. 

Social

Companies have a responsibility for their employees as well as their impact on the societies in which they operate – for instance in terms of working conditions, labour rights and diversity.

Below is an example from a clothing manufacturer and how companies can address working conditions, health and safety in factories. 

Governance

Governance can serve as a control mechanism in relation to bribery and corruption, tax, executive remuneration, shareholders’ voting possibilities and internal control. We believe active corporate governance is important to the development of companies and provides long-term benefits for shareholders, employees and society. 

One way of ensuring this is to focus on increasing transparency and openness in contacts between the company and shareholders on issues such as board composition and shareholder rights.

To see how we have voted at various Annual General Meetings, please visit our Voting Portal