Environmental factors assess a company’s impact on the natural world and its efforts to manage resources and mitigate negative environmental effects. Key areas include: Carbon Footprint: Measures the company’s greenhouse gas emissions and its efforts to reduce them. This involves evaluating energy consumption, transportation practices, and production processes to minimize environmental impact. Resource Management: Focuses on efficient use of resources such as water, raw materials, and energy. Companies are encouraged to adopt sustainable practices and technologies to reduce waste and conserve resources. Biodiversity and Conservation: Evaluates a company’s approach to protecting biodiversity and natural ecosystems. This involves considering land use practices, deforestation, and habitat preservation. Waste Management: Addresses how a company handles waste disposal and recycling. Minimizing waste and promoting responsible waste management practices are important aspects. Social factors assess how a company interacts with its employees, customers, communities, and other stakeholders. Key areas include: Labor Practices: Evaluates employee rights, fair wages, working conditions, and diversity and inclusion policies. Companies are encouraged to create a positive and inclusive work environment. Community Engagement: Focuses on a company’s involvement in the communities where it operates. This can include philanthropy, community development, and initiatives that address local challenges. Customer Relations: Examines product safety, quality, and ethical marketing practices. Companies are expected to provide transparent information to consumers and address any concerns promptly. Human Rights: Considers a company’s commitment to upholding human rights, both within its operations and throughout its supply chain. This involves preventing issues such as forced labor and child labor. Governance factors assess a company’s leadership, management practices, and overall transparency. Key areas include: Board Composition: Examines the diversity, independence, and expertise of a company’s board of directors. A well-balanced board is more likely to make informed decisions. Executive Compensation: Evaluates the alignment of executive compensation with company performance and shareholder interests. Transparent and reasonable compensation structures are important.