ESG aspects of sustainability
Sustainability is usually divided into three areas: environmental responsibility, social responsibility and financial responsibility. In the financial sector, the abbreviation ESG (Environmental, Social, Governance) is usually used for this.
Corporate responsibility
Responsible business operations are sustainable and profitable in all respects, and take into account the direct and indirect effects of their operations on society, people and the environment. Therefore, corporate responsibility is an important part of a company’s risk management. The starting point of corporate responsibility is the reduction, elimination and prevention of the negative externalities of operations.
Environment
Since business activity always inevitably results in some kind of negative environmental effects, the goal in the area of environmental sustainability is to minimise negative effects (do no significant harm).
Social
Social responsibility refers to all the effects that the company’s operations have on different groups of people and organisations. Stakeholders include personnel, customers, local residents and subcontractors. The goal of social responsibility is to eliminate and prevent all kinds of negative externalities (do no harm).
Governance
Financial responsibility includes ensuring the profitability, competitiveness and efficiency of business operations. A company can bear its social and environmental responsibilities only if its financial performance is good.
Verification of sustainability
A mere declaration of sustainability is not enough. Concrete evidence is needed to verify sustainability. These include reliably conducted surveys, sustainable actions and the realisation of sustainability goals in practice. Sustainability must be shown, verified and reported transparently, otherwise the talk of responsibility can be seen as just greenwashing.
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