ESG Categories and Subcategories List

Environment protection using renewable energy

Introduction

Environmental, Social, and Governance (ESG) criteria have become essential components of corporate sustainability and responsibility reporting. These criteria help investors, stakeholders, and companies evaluate the ethical impact and sustainability practices of a company. ESG categories encompass a wide range of issues, from environmental stewardship to social responsibility and governance practices. This blog post delves into the main categories and sub-categories of ESG, providing a comprehensive overview of each to highlight their importance and implementation.

1. Environmental

The environmental category of ESG focuses on a company’s impact on the planet. This encompasses various practices and strategies to minimize negative effects on the environment and promote sustainability.

1.1 Climate Change Mitigation

Carbon Footprint: Measures the total greenhouse gases emitted directly and indirectly by a company.
Circular Economy: Encourages recycling and reusing materials to extend the lifecycle of products.
Circular Supply Chains: Implementing closed-loop systems to minimize waste and maximize resource efficiency.
Energy Consumption Intensity: Evaluating the amount of energy used per unit of production or service.
Greenhouse Gas Emissions: Monitoring and reducing emissions of gases that contribute to global warming.
Heatwave Mitigation: Implementing measures to reduce the impact of heatwaves on operations and communities.
Product and Service Innovation: Developing new products or services that reduce environmental impact.
Renewable Energy Usage: Increasing the use of renewable energy sources to power operations.
Supply Chain Impact: Assessing and minimizing the environmental impact of the supply chain.
Use and Production of Fossil Fuels: Reducing reliance on fossil fuels and transitioning to cleaner energy sources.
Water Consumption Intensity: Measuring and reducing water usage relative to production output.

1.2 Climate Change Adaptation

Advocacy and Policy Engagement: Engaging in policy advocacy to support climate resilience.
Climate Risk Management: Identifying and managing risks related to climate change.
Coastal Erosion Prevention: Implementing measures to prevent and mitigate coastal erosion.
Drought Preparedness: Developing strategies to manage and mitigate the impact of droughts.
Flood Defenses: Building and maintaining infrastructure to protect against flooding.
Infrastructure Adaptation: Modifying infrastructure to withstand climate impacts.
Resilience Building: Enhancing the resilience of communities and operations to climate change.
Water Resource Management: Efficiently managing water resources to ensure availability and quality.

1.3 Pollution

Air and Soil Pollution: Monitoring and reducing pollutants released into the air and soil.
Cumulative Impacts: Assessing the combined impact of multiple pollution sources.
Emissions of Inorganic Pollutants: Controlling emissions of inorganic substances that can harm the environment.
Emissions of Air Pollutants: Reducing harmful air emissions from operations.
Emissions of Water Pollutants: Minimizing pollutants released into water bodies.
Noise, Light, Vibration, and Heat: Managing the impact of noise, light, vibration, and heat from operations.
Pest Management: Using sustainable methods for controlling pests.
Production of Hazardous Waste: Reducing and safely managing hazardous waste.
Water Pollution: Preventing and mitigating water contamination.

1.4 Biodiversity and Ecosystems

Biodiversity and Ecosystem Management: Protecting and enhancing biodiversity and ecosystems.
Invasive Alien Species: Managing and preventing the spread of invasive species.
Marine Ecosystem Conservation: Protecting marine environments and promoting sustainable practices.

1.5 Resource Management

Chemical Management: Safely managing chemicals to prevent environmental harm.
Responsible Sourcing of Materials: Ensuring materials are sourced sustainably.
Responsible Sourcing of Water: Promoting sustainable water sourcing practices.
Sustainable Agriculture: Implementing agricultural practices that protect the environment.
Waste Management: Reducing, reusing, and recycling waste.
Water Efficiency: Improving the efficiency of water use.

1.6 Land Use and Landscape

Land Use: Managing land resources sustainably.
Location, Project Siting, and Design in Relation to Landscape: Considering environmental impacts in project siting and design.
Soil Restoration: Restoring and improving soil health.

2. Social

The social category of ESG focuses on a company’s relationships with its employees, suppliers, customers, and communities.

1.1 Human Rights

Human Rights Commitment: Committing to uphold and promote human rights.
Human Rights Complaints and Violations: Addressing and preventing human rights violations.
Human Rights Impact Assessments: Assessing the impact of operations on human rights.
Human Rights in Supply Chains: Ensuring supply chain practices uphold human rights.
Minorities and Indigenous People: Protecting the rights of minorities and indigenous peoples.
Rights to Association and Collective Bargaining: Supporting workers' rights to organize and bargain collectively.

1.2 Labor Rights and Working Conditions

Anti-Corruption Measures: Implementing policies to prevent corruption.
Discrimination: Preventing and addressing discrimination in the workplace.
Diversity and Inclusion: Promoting diversity and inclusion within the company.
Employee Grievance Mechanism: Providing mechanisms for employees to raise concerns.
Equal Remuneration: Ensuring equal pay for equal work.
Equal Representation: Promoting equal representation in the workforce.
Fair Labor Practices: Ensuring fair labor practices and conditions.
Fair Wages and Access to Employee Documentation: Providing fair wages and access to employment documentation.
Forced Labor and Child Labor: Preventing forced labor and child labor.
Labor Standards in the Supply Chain: Ensuring supply chain labor practices meet standards.
Labor Union Relations: Maintaining positive relations with labor unions.
Occupational Health and Safety: Ensuring safe and healthy working conditions.
Retrenchment: Managing layoffs and workforce reductions responsibly.
Workers in Value Chain: Protecting the rights of workers throughout the value chain.
Working Conditions in the Supply Chain: Ensuring safe and fair working conditions in the supply chain.
Working Hours and Leave: Regulating working hours and leave policies.

1.3 Community Protection

Affected Communities: Supporting and protecting communities affected by operations.
Community Engagement and Philanthropy: Engaging with and supporting local communities.
Cultural Heritage: Preserving cultural heritage and respecting cultural sites.
Delivery of Public Health and Safety Benefits: Providing health and safety benefits to the public.
Management of Public Health and Safety Risks: Managing risks to public health and safety.
Physical Accessibility: Ensuring physical accessibility for all.
Poverty Reduction: Implementing measures to reduce poverty.
Resettlement: Managing resettlement responsibly.
Social License to Operate: Maintaining a social license to operate through positive community relationships.

1.4 Customer Focus and Community Involvement

Customer Protection and Product Responsibility: Ensuring product safety and customer protection.
Customer Relations: Maintaining positive relationships with customers.
Customer Service and Support: Providing high-quality customer service and support.
Marketing and Advertising Ethics: Ensuring ethical marketing and advertising practices.
Provision of Basic Infrastructure Services: Providing essential infrastructure services.
User Affordability: Ensuring products and services are affordable.

1.5 Socioeconomic Development

Access to Finance: Providing access to financial services.
Access to Healthcare and Basic Services: Ensuring access to healthcare and essential services.
Direct Employment and Training: Creating jobs and providing training.
Employment Policy: Implementing fair and inclusive employment policies.
Human Capital Development and Training: Investing in employee development and training.
Socioeconomic Development: Promoting socioeconomic development in communities.

1.6 Supply Chain

Controversial Sourcing: Avoiding sourcing from controversial suppliers.
Supplier Audits and Monitoring: Conducting audits and monitoring suppliers.
Supplier Engagement: Engaging with suppliers to promote sustainable practices.
Supply Chain Diversity and Inclusion: Promoting diversity and inclusion in the supply chain.

3. Governance

The governance category of ESG focuses on a company’s leadership, ethics, and internal controls.

3.1 Management and Oversight

Audit and Internal Controls: Implementing robust audit and internal control systems.
Board Diversity and Independence: Promoting diversity and independence on the board.
Board Oversight: Ensuring effective oversight by the board of directors.
Board Quality and Integrity: Maintaining high standards of board quality and integrity.
Compliance and Ethics Programs: Implementing comprehensive compliance and ethics programs.
Corporate Governance Policies: Establishing sound corporate governance policies.
Ethical Business Practices: Promoting ethical business practices.
Executive Compensation: Ensuring fair and transparent executive compensation.
Financial Sustainability: Maintaining financial sustainability.
Governance Oversight: Ensuring robust governance oversight mechanisms.
Infrastructure Connectivity and Integration: Promotes infrastructure connectivity and integration.
Organizational Structure and Management: Establishes effective organizational structures.
Project Team Competency: Ensures project teams are competent.
Public Disclosure: Maintains transparency through public disclosure.
Results Orientation: Focuses on results and accountability.
Risk Management: Implements effective risk management practices.

3.2 Sustainability and Resilience Management

Emergency Response Preparedness: Prepares for emergency response.
Engagement and Participation: Promotes stakeholder engagement and participation.
Environmental and Social Management Systems: Implements management systems for environmental and social issues.
Life Cycle Approach: Adopts a life cycle approach to product and service design.
Pre-existing Liabilities: Manages pre-existing liabilities responsibly.
Resilience Planning: Develops resilience plans.
Stakeholder Identification and Engagement Planning: Identifies and plans engagement with stakeholders.
Supply Chain: Manages sustainability in the supply chain.

3.3 Stakeholder Engagement

Public Grievance and Customer Feedback Management: Manages public grievances and customer feedback.
Shareholder Rights: Protects shareholder rights.
Stakeholder Engagement in Governance: Ensures stakeholder engagement in governance.

3.4 Anti-Corruption and Transparency

Anti-Bribery and Corruption Management System: Implements systems to prevent bribery and corruption.
Cybersecurity and Data Privacy: Ensures robust cybersecurity and data privacy measures.
Fair Competition: Promotes fair competition.
Financial Transparency on Taxes and Donations: Ensures financial transparency regarding taxes and donations.
Political Contributions and Lobbying: Manages political contributions and lobbying activities transparently.

Conclusion

Understanding and implementing ESG criteria is crucial for businesses aiming to achieve sustainability and ethical governance. By focusing on these categories and sub-categories, companies can address significant environmental, social, and governance issues, thereby enhancing their reputation, ensuring compliance with regulations, and contributing to a more sustainable future. The integration of ESG practices into corporate strategy not only benefits the environment and society but also drives long-term business success.