top of page
  • ESG Everyday

What is the difference between 'ESG' and 'Sustainability'?

Updated: Mar 16, 2023


ESG (Environmental, Social, and Governance) and sustainability are related concepts, but they have different meanings and applications.


ESG refers to a set of factors that are used to evaluate the sustainability and ethical impact of a company or organization. These factors include environmental considerations such as climate change, carbon emissions, and water and waste management; social considerations such as labor standards, human rights, and community engagement; and governance considerations such as transparency, accountability, and executive compensation. ESG factors are increasingly used by investors and stakeholders to assess the long-term value creation and risk management of a company or organization.


Sustainability, on the other hand, is a broader concept that encompasses not only ESG factors but also the broader goal of meeting the needs of the present without compromising the ability of future generations to meet their own needs. Sustainability involves the responsible management and use of natural resources, the protection of the environment, and the promotion of social and economic development that is equitable and inclusive. While ESG factors are often used to evaluate the sustainability performance of a company or organization, sustainability encompasses a wider range of considerations and requires a more holistic approach to business and economic development.


In summary, ESG is a set of factors used to evaluate the sustainability and ethical impact of a company or organization, while sustainability is a broader concept that encompasses a wider range of considerations related to responsible and equitable economic and social development.


According to Nasdaq Stock Exchange,


"We have seen a transition from vague, philosophical, and aspirational language (“sustainability”) to more specific, operational, and tactical terms (“ESG”). ESG means Environmental, Social, and Corporate Governance information, but it also means something else; not text but data, focusing on performance that is measurable, manageable, actionable, and reportable.


• Microsoft ((Nasdaq: MSFT) doesn’t just publish the text of their vendor responsibility code, but lists its top 100 suppliers by spend annually


• Cisco (Nasdaq: CSCO) doesn’t simply publish photographs of the many food drives that it organizes, but also the total amount of food (by weight) donated"

9 views0 comments

Recent Posts

See All

Comments


bottom of page