ESG criteria: what are they and why are they so important for investors?

CRS Trends  »  ESG criteria   »   ESG criteria: what are they and why are they so important for investors?

The responsibility to make real changes to confront the environmental crisis is a matter of everybody and all professional activities, including investments. Here is where ESG criteria and socially responsible investments gain importance.

Aligned with this responsibility, companies are increasingly including these initials (ESG) onto their vocabulary. But, what does each initial actually imply?

  • E as in environmental talks about the direct and indirect impact of companies’ activities in the environment.
  • S as in social, includes the impact a given company has in its social atmosphere or in nearby communities.
  • G as in Governance considers the impact shareholders themselves have, and it is based upon questions of structure like director boards, shareholder rights or transparency, among other questions.


What are ESG criteria and what are they for?

ESG criteria refer to environmental, social and governance factors that are taken into account in order to invest in a company. It is key for companies to work on them as they are of great importance for investors when they have to choose where to put their money. Let’s talk about socially responsible investment (SRI)


What does SRI imply?

Socially responsible investment focuses on analyzing variables beyond financial ones. It is a kind of investment philosophy that integrates ESG criteria in the study, analysis and selection process, taking into account not only the present, but also the future.


Integrating ESG criteria, companies manage to achieve a better profitabiility and comittment to society.


Why are ESG criteria relevant to investors?

In the last few years, the concern for the environment and society has grown gradually among investors.

We also need ot take into account a long list of climate related regulations that are now compulsory and should be followed. Institutional investors ask for ESG matter to be taken into account in the investment processes, and they higlight the importance of having trustworthy data among entities resgarding sustainability, so as to be able to make the right assessment for investing.

Investors are also trying to minimize thier reputational risks.
Socially Responsible Investments
In order to know more about how to monetize your CSR strategy, you can check out our CSR Profitability Guide.

Considering these criteria

The more data we have on ESG criteria, the more we can help integrate and adopt them for professional activities.

In DoGood we help you improve ESG metrics and non financial reports thanks to our SaaS technology.

If you want to know more about how we work to create a positive social and environmental impact, click here.