What is ESG?

The three letters cover roughly this:

• Environmental — energy, fuel, waste, water, and the greenhouse gases that come with them.
• Social — how people are treated: employees, contractors, the people in your supply chain, the community around you.
• Governance — who decides things, how conflicts of interest and bribery are handled, whether anyone is accountable.

ESG began as investor language. Fund managers wanted a way to compare non-financial risk across companies, so they asked for standard disclosures. That is why the vocabulary sounds like it was written for a listed company — it was.

What changed is that the requirement travelled down the supply chain. A listed company that must report its own emissions eventually has to ask its suppliers for theirs, and most of those suppliers are small businesses that never heard the term until the email arrived.