ESG

What it means

Environmental, Social and Governance. It groups three families of topics: environmental, such as emissions, water and waste; social, such as working conditions and community relations; and governance, such as board composition and ethics.

Where it comes from

The expression appears in 2004, in the UN Global Compact report Who Cares Wins, addressed to the financial sector. It started as a way of looking at companies from the investment side.

ESG is not a standard

There is no "ESG certificate" and no single list of indicators. It is a category. What does exist are reporting standards, such as GRI or IFRS S2, and third-party assessments, such as EcoVadis or CDP, each with its own method.

That is why two ESG ratings of the same company may not match.

How it shows up in Chile

The CMF's NCG 461 does not use the acronym. It asks reporting entities to include sustainability and corporate governance information in their annual report, with SASB metrics by industry.

Where carbon fits

Under the E. A carbon footprint is the environmental figure most often requested, and almost always the first.

Source: Who Cares Wins, UN Global Compact, 2004.