Part 2) ESG Concepts & definitions
ESG stands for Environment, Social and Governance. With ESG you can develop frameworks to address risks and opportunities for business conduct. Typical ESG frameworks are made for ESG compliance, ESG transparency, ESG strategy and ESG performance. As you will learn, on this website we will focus on the last two types of framework. There is a mantra you should keep repeating that will help you understand these ESG frameworks better. Materials, energy, people. Materials, energy, people. Materials, energy, people. ;-)
ESG frameworks, at their core, are meant for bookkeeping. Not (only) financial data, but also for materials, energy, and people. This way, you create records that will help to generate management information. The leadership of a company will be able to steer the three fundamentals of business (economy) more insightfully.
Energy and carbon emissions have a one on one relationship. To create electricity, heat or movement is the way to put the required energy in a process of production or consumption. Understanding carbon emissions is key in developing an ESG strategy. The Greenhouse Gas Protocol sorts these emissions into three main types to see where they come from in a company's value chain.
ESG maturity is a way to understand a companies collected ESG data in order to evaluate ESG current state, ESG strategy and track ESG performance in a more vivid and qualitative way.
