The social contract proposed three main responsibilities of businesses, which are still relevant today: providing jobs and economic growth, ensuring fairness with respect to employees and customers, and becoming involved to improve the conditions of the broader community and environment where it operates.

ESG criteria set standards for a company’s operations based on how environmentally or socially conscious their operations are. Environmental criteria measure a company’s level of responsibility with respect to the nature and protection of natural ecosystems. Social criteria measure a company’s responsibility with respect to business ecosystems,

More recently, the Financial Stability Board (FSB) launched the Task Force for Climate-Related Financial Disclosures, which in 2017 released recommendations to support companies disclosing this information to support capital allocation. These recommendations focus on four themes for organizational operations: governance, strategy, risk management,

More recently, in an important move toward consolidation in ESG standards, in 2020, SASB has announced a merger with IIRC to take place by mid-2021.29 The merger is meant to simplify ESG disclosures.

Circular Economy This refers to an industrial model that redefines the use of resources in a traditionally take-make-waste industrial model, in order to design waste and pollution out of the system.

Over the long term, High Sustainability companies were found to significantly outperform Low Sustainability companies, both with respect to stock market performance and accounting measures (e.g., return-on-equity and return-on-assets). It may be concluded that the implementation of sustainability practices, and the ability to institutionalize them

One example of organizational structure that specifically focuses on for profit companies’ commitment to sustainability through a standalone certification is the B Corporation. This class of businesses, across sectors and industries, has committed to the integration of profit and purpose within their strategy. The B Corp certification legally

The emerging concept of creating shared value (CSV) described in Chapter 1, as a development beyond CSR, is a push to shift CSR practices from being cost centers disconnected from business strategy to becoming a source of profitability through innovation and competitive advantage.

With the increasing demand from investors for ESG conscious investment opportunities, and the potential for significant returns, the need for portfolio construction tools and metrics to analyze and compare investment options took off. Founded in 2009, the Global Impact Investment Network (GIIN),30 for instance, represents a commitment to utilize