ESG stands for Environmental, Social, and Governance — a framework for evaluating non-financial factors that can affect a company's long-term risk and performance.

Environmental (E): How a company interacts with the natural world. - Climate change strategy and carbon emissions - Air and water pollution, waste management - Water usage intensity and biodiversity impact - Clean energy transition and stranded asset risk

Social (S): How a company manages relationships with people. - Labor standards, worker safety, fair wages - Diversity, equity, and inclusion (DEI) programs - Supply chain human rights due diligence - Data privacy, product safety, community relations

Governance (G): How a company is led and controlled. - Board independence and composition - Executive compensation and pay ratios - Shareholder rights (voting, anti-takeover provisions) - Audit quality, accounting transparency, anti-corruption

Governance is often called the most actionable pillar — poor governance frequently predicts accounting fraud and mismanagement before financial statements reveal problems.