Environmental social governance (ESG) indicates the qualitative and quantitative data that describes a business’s environmental status, societal characteristics, and corporate governance. ESG also reflects an organization’s ability to manage environmental, social, or governance-related risks.
As climate change and the social impact of capitalism become increasingly illuminated, companies are racing to differentiate themselves by seeking a competitive advantage among investors. Understanding ESG and its implications for business is vital for aspiring changemakers.
Recent Kogod MS in sustainability management graduate Nichole Powers leveraged her undergraduate background in finance by incorporating ESG into her education. As an undergraduate student at Pennsylvania State University, Powers held a full-time internship working with ESG data at Bloomberg.
“I was exposed not only to what ESG data and sustainability mean to companies and investors, but also to how impactful the concept of sustainability is to all levels of society,” says Powers.
Exposure to ESG through Bloomberg was the catalyst behind Powers' choice to forge a long-term career in the business sustainability field.
“I’m encouraged by recent proposals from the Securities and Exchange Commission (SEC) to require public companies to disclose their greenhouse-gas emissions and how climate change risks may affect their business, along with proposals to improve the transparency of US investment funds labeling themselves as sustainably-minded or green-focused," says Powers.
Powers hopes that by establishing business regulations around ESG issues that align with traditional financial principles, businesses will begin to think more critically about their sustainable practices while improving the general population’s knowledge of these issues.
This fall, Kogod is launching a first-of-its-kind ESG course that will allow students to invest using 1 percent of the university’s endowment fund.