ESG is an umbrella for non-financial factors investors and companies are asked to account for: environmental impact, treatment of people and communities, and how the company is directed and controlled. Nobody owns the term, and the looseness is not incidental — it is the source of most argument about it. The three strands have little in common analytically, and bundling them lets a strong score on one offset a weak score on another. Ratings providers each use their own methodology, weightings and data sources, so two ESG scores for the same company frequently disagree, and neither is wrong against a benchmark because there is no benchmark. Disclosure requirements in several jurisdictions now attach real obligations to particular defined metrics. Those definitions bind; the umbrella term does not. When ESG appears in a contract or a mandate, ask which specific standard or metric is meant.
Why this entry carries no source list. This lexicon cites an official primary source wherever one exists and says plainly where none does. No body defines this term. Pointing at a regulator that happens to use it, or at a ratings provider’s methodology, would present one participant’s usage as a general rule.