The environmental aspect of ESG focuses on improving the environmental performance of a business. It measures a business’ impact on the natural environment and the natural environment’s impact on the business, for instance through physical climate risks. It takes into account factors including a business’ carbon footprint, its impact on biodiversity and its production of waste and pollution.
This aspect includes the following topics:
- climate change;
- greenhouse gas emissions (in particular carbon dioxide);
- emissions to air, water and land;
- product carbon footprint; pollution and waste (toxic emissions and waste, packaging material and waste and electronic waste);
- deforestation and land use;
- treatment of animals;
- energy efficiency;
- raw material sourcing;
- resource depletion (including water);
- recycling; and
- environmental opportunities (clean tech, green building and renewable energy).