Environmental, social and governance factors
ESG / ESG · ESG factors
Environmental, social and governance factors are categories of non-financial risk and impact used to assess how an organisation and its suppliers affect the environment, people and the quality of governance.
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Simply put
What it means in ordinary work
ESG is a broad label for issues such as emissions, labour practices, safety and business ethics. It is not one score or one law.
Why it matters
Procurement decisions can create environmental and social impacts through the supply chain. Considering ESG factors helps manage risk, meet obligations and align spending with organisational priorities.
A hypothetical in practice
A hypothetical buyer includes energy use, worker safety, board oversight and corruption controls in a supplier assessment, with different weights for different categories.
Common pitfalls
A single ESG score can hide material differences between issues and suppliers. Use transparent criteria.
Claims without evidence invite greenwashing and governance risk. Ask for data, scope and assurance.
Regional lens
How this lands where you work
The global explanation is canonical. Regional notes are additive, separately sourced and shown with their own review state. They never replace the global meaning.
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As-of date for date-sensitive regional content: 5 November 2026. Read the review policy.