ESG, which stands for environmental, social, and governance, is a growing trend in the business world. Companies are increasingly using ESG factors to define success and build long-term value for their stakeholders, in response to growing concerns among employees, customers, investors, and communities about the impact of business on society and the environment.
Although progress has been made in standardizing and quantifying measures of companies’ performance on ESG criteria, gauging ESG impact remains a challenging task. The difficulties include unreliability of sources, data changing over time, lack of transparency and consistency in methods, and possible rater bias. This may explain why some companies are ranked in the top quartile of consensus of ESG ratings while simultaneously being among the largest producers of greenhouse gases on the planet.
It's time for companies to integrate sustainability into their strategy and operations by connecting financial and social performance.
In this edition of the Library Newsletter, we offer a selection of resources available on ESG for the IESE community that could be useful for better understanding the importance of ESG data.