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What is sustainability?
Sustainability refers to a business's ability to meet its current needs without compromising the needs of future generations. To achieve this, a firm’s practices can be assessed against the three core pillars of sustainability: Environmental, Social, and Governance, or ESG for short, to measure the sustainability and social impact of these. These three core pillars cover a range of areas, including environmental impact, employment practices, and accounting practices. Sustainability considerations have become increasingly important for investors in looking to align their investments with their core values.
- Environmental focuses on how companies address environmental issues, such as carbon emissions, energy efficiency and waste management.
- Social examines how businesses manage relationships with employees, suppliers, customers and the communities they serve.
- Governance evaluates corporate leadership, internal controls, transparency and ethical practices.
Embracing the sustainability principle, through consideration of the 3 core pillars, goes beyond meeting compliance requirements; it’s about building a firm that thrives in a changing world while making a positive impact.