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Examples of ESG Factors and Related Impacts

Examples of ESG Factors and Related Impacts

Area of focus Activity Potential impact on financial performance
Environment
  • Resource management and pollution prevention
  • Reduce emissions and climate impact
  • Environmental reporting/disclosure
  • Avoid or minimize environmental liabilities
  • Lower costs/increase profitablity through energy and other efficiencies
  • Reduce regulatory, litigation and reputational risk
  • Indicator of well-governed company
Social

Workplace

  • Diversity
  • Health and safety
  • Labor-Management relations
  • Human rights
Product Integrity
  • Safety
  • Product quality
  • Emerging technology issues
Community Impact
  • Community relations
  • Responsible lending
  • Corporate philanthropy

Workplace

  • Improved productivity and morale
  • Reduce turnover and absenteeism
  • Openness to new ideas and innovation
  • Reduce potential for litigation and reputational risk
Product Integrity
  • Create brand loyalty
  • Increase sales based on products safety and excellence
  • Reduce potential for litigation
  • Reduce reputational risk
Community Impact
  • Improve brand loyalty
  • Protect license to operate
Corporate Governance
  • Executive compensation
  • Board accountability
  • Shareholder rights
  • Reporting and disclosure
  • Align interests of shareowners and management
  • Avoid negative financial surprises or "blow-ups"
  • Reduce reputational risk