ESG – Environmental, Social and Governance

ESG stands for Environmental, Social and Governance. These are key criteria when measuring the sustainability impact of an organization.

More and more customers are looking not only at the quality of products and services, but also how an organization governs itself to contribute to the wider environment and society. Similarly, investors are no longer only interested in the financial performance of an organization but also its ESG metrics and targets. Disclosing and reporting ESG performance is becoming more popular, particularly for listed companies and organizations looking for green finance.

Environmental criteria consider how an organization approaches reversing climate change, enhancing resource efficiency, and reducing pollution and waste.

Social criteria address how an organization manages social relationships with employees, suppliers, customers, and the communities where it operates. Concerns include diversity, human rights and employee welfare.

Governance deals with an organization's leadership, transparency and accountability. It examines how an organization transparently addresses stakeholders’ concerns and interests.

ESG criteria are being rapidly developed surrounding international best practices such as the UN Sustainable Development Goals (SDGs) and the Science Based Targets initiative (SBTi). Developing your ESG strategies based on these and on relevant local initiatives will facilitate your sustainability journey.

You can attend an ESG training course offered by SGS Academy to get some fundamental knowledge from our ESG experts. ESG training courses can be customized to suit your needs.

Getting started can sometimes be the most challenging part of any journey. No matter your company size or type, our ESG Health Check can help kick-start your journey to implementing your ESG strategy. It gives you an objective snapshot of the current status of ESG management and risks, to help you move forwards on ESG effectively.

Yes, if they agree to do so. With our global expertise and network, you can ensure your ESG strategies are implemented effectively along your supply chain.

The ESG Health Check is designed to efficiently measure your current ESG status. Regardless of the size of your organization, an ESG Gap Analysis is the process of conducting a materiality assessment of your ESG issues and then a performance assessment of how you are managing those issues. The ESG Gap Analysis also gives you full findings, recommendations and a road map for your ESG strategies.

If you would like to be publicly listed or engage in green finances, sustainability-linked products, mergers or acquisitions, you will need to demonstrate that your ESG metrics and targets are verified and assured by an independent third-party, like SGS. These are usually mandatory processes in due diligence, risk evaluation, risk management, Second Party Opinion (SPO) and Equator Principles.

The guidance from the regulatory authority usually details how your ESG performance should be disclosed and reported. Validating your ESG claims is not only for compliance purposes but also to avoid greenwashing, which can impact your investment portfolio and future business opportunities.

Absolutely. SGS is a world leader in testing, providing a broad range of testing services to clients around the globe. The testing services against your products, services, materials, ingredients or premises can be part of the ESG services.

It depends on how your report is used. Generally, the Global Reporting Initiative (GRI) Standards, AA1000 AccountAbility Principles and Sustainability Accounting Standards Board (SASB) Standards are the dominant reporting standards. Our ESG experts will be able to offer services against other reporting standards according to your local and organizational needs.

SGS follows the requirements and guidelines set by relevant organizations. Generally, the International Standard on Assurance Engagements 3000 (ISAE 3000) and AA1000 Assurance Standard are the dominant assurance standards. Furthermore, our ESG experts will be able to offer services against other assurance standards according to your local and organizational needs.

You need to check the criteria with relevant financial institutions. You may also need a third-party statement from SGS to validate your ESG claims.

SGS ESG certification is a certification scheme developed by SGS to assess the management of environmental, social and governance issues in an organization. ESG-related ISO certification is a certification after satisfactory audits against a relevant standard published by the International Organization for Standardization (ISO).

SGS Academy offers various ESG training courses in different levels and topics that will meet your needs. Our ESG Disclosures & Sustainability Report Assurance service can also help demonstrate your ESG accountability, accurately and consistently.

Materiality refers to an organization's significant economic, environmental and social impacts, or to issues that substantively influence the assessments and decisions of stakeholders. In recent years, a concept of “double materiality” was proposed by the European Commission. It provides criteria to determine whether a sustainability matter or information has to be included in a sustainability report from an impact perspective, a financial perspective, or both.

We are a leader, not only in providing ESG services for over 30 years, but also as an active participant in demonstrating best practices. Our ESG experts actively contribute to developing international standards, frameworks, schemes and regulations, such as the UN Sustainable Development Goals (SDGs), UN Principles for Responsible Banking (PRB) Assurance and EU Corporate Sustainability Reporting Directive (CSRD). With extensive expertise and experience in all major industries, we understand each sector’s pain points and have the technical expertise and logistical capabilities across the globe to ensure realistic sustainability outcomes.