ESG Metrics: Tips And Examples For Measuring ESG Performance
TechTarget, March 31st, 2023
ESG metrics measure performance on environmental, social and governance issues. Here's how they can benefit companies, plus tips on using them effectively.
In recent years, environmental, social and governance considerations have become increasingly important for businesses. While issues such as employee well-being and business ethics have been longstanding concerns, sustainability, environmental impact and broader social factors have now also come into focus as key elements of ESG initiatives.
With this increased attention, business leaders must be able to measure their organization's ESG performance, especially to help manage risk. For example, companies in industries with high environmental risks, such as oil and gas, need to be aware of their carbon footprint and potential liability for pollution. Similarly, companies that have poor labor practices may face reputational damage and legal action if they don't use ESG metrics to identify the problems.