Sustainability, Environmental, Social and Governance
Investors at NPEX are increasingly interested in the sustainability performance of our issuing and listed companies. Sustainability, Environmental, Social and Governance are broad concepts.
Internationally, the concepts are endorsed as ESG and stands for Environmental, Social, and Governance. It is a term used to describe the three main factors used in assessing the sustainability and responsibility performance of a company or organization.
In addition, there are the Sustainable Development Goals (SDGs). These are 17 goals to which all members of the United Nations have committed themselves, with the aim of achieving and maintaining peace and prosperity for people and the planet. A company can commit to these goals or a number of them. Companies often also express that they are pursuing these goals.
NPEX has chosen to list companies that pursue SGD goals and/or apply an ESG policy on the NPEX company page.
We also find it increasingly important to identify companies that perform well in the field of sustainability and corporate responsibility. This can help investors make decisions that are consistent with their values and objectives. In addition, ESG considerations encourage companies to commit to sustainability and social responsibility.
Would you like to read more about how the United Nations has incorporated the Sustainable Development Goals? Read it on the UN website: https://www.un.org/sustainabledevelopment/sustainable-development-goals/.
SDGs and ESG include non-financial themes to assess the consequences of business operations on the environment, people and society.
Although the terms ESG and SDG have become commonplace, there is no clear way in which companies measure or report on this. As an NPEX investor, therefore, take a good look at the company and/or whether, in your opinion, it meets the concepts and goals.
What is ESG
Environmental: This refers to a company's impact on the environment. It covers topics such as climate change, energy consumption, water use, waste management, pollution and the protection of natural resources. Companies are judged on their efforts to implement environmentally friendly practices and reduce negative environmental impacts.
Social (Social): This refers to the way a company interacts with its employees, customers, suppliers and the communities in which it operates. It covers topics such as working conditions, diversity and inclusion, human rights, consumer protection, social engagement and involvement in the local community. Companies are judged on their efforts to promote social justice, equality and well-being.
Governance (Board): This refers to the structure, policies and procedures used to govern and manage a business. It covers topics such as transparency, ethics, director independence, accountability and the protection of shareholder interests. Companies are judged on their governance practices and the extent to which they take responsibility for their actions.