ESG stands for Environmental, Social, and Governance. It is a framework used to measure how a company behaves beyond just making a profit. ESG looks past traditional financial report to evaluate how non-financial factors might predict how stable and successful a company will be in the future.

The framework is broken into three pillars:

1. Environmental: A company’s impact on the planet (e.g., carbon footprint, waste management)
2. Social: A company’s impact on people (e.g., employee safety, diversity, community relations)
3. Governance: How a company is led (e.g., executive pay, board transparency, business ethics)

The ESG framework started as a way for investors to make better choices, but it has grown into a standard for building stronger, more ethical businesses.

How is ESG information shared?

ESG information is typically reported through annual sustainability reports, official company filings, and public websites, depending on the company’s size and legal requirements. While most Canadian companies aren’t yet legally required to publish full ESG reports, sharing this data is becoming essential to secure funding, win partnerships, and attract top talent.

ESG vs. Corporate Social Responsibility (CSR)

When discussing how companies address social and ethical responsibilities, it is important to distinguish between two closely related concepts: ESG and Corporate Social Responsibility (CSR). The simplest way to distinguish between the two is: CSR is the action; ESG is the measurement.

• CSR refers to a company’s voluntary efforts to ‘do good,’ like donating to charity or volunteering. It is often self-directed and varies from company to company.
• ESG is a structured way to track and prove those efforts. It uses specific data and standardized criteria so that investors can compare companies and assess potential risks.

More information

For more information, visit The Canada Energy Regulator and ESG – Overview of Environmental, Social, and Governance (ESG).

								
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