ESG Meaning & Definition | EcoOnline
Health & Safety Glossary

ESG (Environmental, Social, Governance)


What is ESG (Environmental, Social, Governance)?

Environmental social governance, or ESG, is a set of standards for measuring the sustainability and ethical impact of businesses and organisations. In other words, it's a framework for ensuring that workplaces are doing their part to protect the environment and promote social responsibility. 

ESG standards cover a wide range of topics, including climate impact, human rights, employee relations, safety, and diversity. 

While some companies may already have policies in place that align with ESG standards, others may need to make changes in order to meet the guidelines. 

Regardless of where your company falls on the spectrum, it's important to be familiar with ESG and what it entails. 

Here's a closer look at why environmental social governance is so important when making investments or in the workplace.

An aerial view of a graphEcoOnline's software can help your business with its vital ESG needs.

The Three Pillars of Environmental Social Governance (ESG)

Let’s take a closer look at each of the three pillars that companies use when creating ESG standards.


The environmental pillar of ESG includes everything from a company's carbon footprint to the sustainability of its supply chain. 

Businesses that focus on this pillar are constantly looking for ways to reduce their environmental impact and to operate in a more sustainable manner. 

This constitutes investing in renewable energy, reducing waste, and partnering with suppliers who have strong sustainability standards. 


The social pillar of ESG focuses on the impacts that businesses have on society. This includes everything from human rights to diversity and inclusion. 

Businesses that focus on this pillar are constantly looking for ways to improve their workplace conditions, create opportunities for marginalized groups, and give back to the community. 

To meet their societal requirements, companies often focus on investing in employee training and development, supporting local charities, and promoting fair trade practices. 


The governance pillar of ESG focuses on how companies are governed and how they make decisions. This includes everything from board diversity to executive compensation. 

Businesses that focus on this pillar are constantly looking for ways to improve their governance structures and make sure that they are making decisions in the best interests of all stakeholders. 

This often includes investing in integrity and compliance programs, ensuring board independence, and protecting shareholder rights.  

The Importance of ESG

ESG standards are becoming increasingly important for many companies. Here are just a few reasons why. 

ESG Encourages Sustainability

One of the main goals of ESG is to promote sustainable practices in the workplace. This includes everything from reducing energy consumption to recycling and waste reduction. 

Implementing sustainable practices not only helps to protect the environment; it can also save businesses money in the long run. 

In addition to promoting sustainability, ESG standards also encourage businesses to disclose their environmental impact. 

This gives consumers and investors the ability to make informed decisions about the products and services they support. 

For example, companies looking to make an investment will consider any sustainable practices adopted by the company they intend to acquire before deciding. 

By promoting transparency, ESG standards help businesses be held accountable for their environmental impact—and that's good for everyone involved. 

ESG Improves Employee Relations

Happy employees are productive employees—and ESG compliance can help to create a happy work environment. That's because many of the standards fall under the umbrella of employee relations. This includes things like employee safety, diversity, and inclusion. 

A diverse workforce is a strong workforce—one that is better equipped to solve problems and innovate. In order for diversity initiatives to be successful, however, employees must feel safe airing their concerns and offering suggestions. 

That's where things like open communication and anti-discrimination policies come into play. By creating an inclusive environment where all employees feel valued, respected, and heard, businesses can encourage creativity and collaboration while also boosting morale. 

Use EcoOnline’s Environmental Health Management Software for ESG Compliance

EcoOnline’s Environmental Health Management Software makes it easy for companies to define their ESG policies and to better understand their environmental impact. 

The platform allows companies to gain actionable insights and use visualization tools to demonstrate compliance with their environmental policies and to better gauge the impact of different business practices. 

It lets companies schedule and manage reading dates and create reminders and alerts using the Action Tracking and Workflow Engine. This ensures no reading is missed or delayed for too long.