What is ESG?
A definitive list of environmental, social and governance (ESG) issues does not exist. It would not be possible or desirable to produce a list, or a set of definitions, that claimed to be exhaustive or definitive. Nonetheless, the table below provides examples of ESG issues, for guidance purposes based on the UN PRI Reporting Framework Main Definitions.
Environmental (E): Issues relating to the quality and functioning of the natural environment and natural systems. These include: biodiversity loss; greenhouse gas (GHG) emissions, climate change, renewable energy, energy efficiency, air, water or resource depletion or pollution, waste management, stratospheric ozone depletion, changes in land use, ocean acidification and changes to the nitrogen and phosphorus cycles.
Social (S): Issues relating to the rights, well-being and interests of people and communities. These include: human rights, labour standards in the supply chain, child, slave and bonded labour, workplace health and safety, freedom of association and freedom of expression, human capital management and employee relations; diversity; relations with local communities, activities in conflict zones, health and access to medicine, HIV/AIDS, consumer protection; and controversial weapons.
Governance (G): Issues relating to the governance of companies and other investee entities. In the listed equity context these include: board structure, size, diversity, skills and independence, executive pay, shareholder rights, stakeholder interaction, disclosure of information, business ethics, bribery and corruption, internal controls and risk management, and, in general, issues dealing with the relationship between a company’s management, its board, its shareholders and its other stakeholders. This category may also include matters of business strategy, encompassing both the implications of business strategy for environmental and social issues, and how the strategy is to be implemented.
Numerous organizations and projects have identified ESG issues by sector, together with associated key performance indicators.
Examples include:
- The European Federation of Financial Analysts Societies (EFFAS): KPIs for ESG - A Guideline for the Integration of ESG into Financial Analysis and Corporate Valuation
- The CFA Institute: Environmental, Social and Governance Factors at Listed Companies - A Manual for Investors
- UNEP FI and WBCSD: Translating environmental, social and governance factors into business value
Reference: United Nation Principles of Responsible Investing, 2018. PRI Reporting Framework Main Definitions. https://www.unpri.org/Uploads/i/m/n/maindefinitionstoprireportingframework127272949397.pdf
WELL can help you formulate and execute a plan for your ESG strategy, so you can make a bigger impact on social issues and communicate that impact to stakeholders.
Understanding reporting frameworks
There are many ESG and sustainability frameworks that exist today; different frameworks serve different needs and areas of focus. Here are some common frameworks, with an explanation of how WELL fits in.
- GRESB (Global Real Estate Sustainability Benchmark) is the leading ESG benchmark for real estate and infrastructure investments across the world and empowers investors to make decisions leading to a more sustainable real estate industry. Together, WELL and GRESB demonstrate the importance of health and well-being for organizations seeking to benchmark, report and improve their ESG performance through real estate.
- The SDGs (Sustainable Development Goals) set broad social and environmental goals. Responsible investors and corporations are increasingly using the UN SDGs to help set benchmarks. WELL offers these organizations a balanced, integrated framework of strategies that supports the health of individuals within buildings and enables the wider community and surrounding environment to thrive.
- Adopted in July 2023 by the European Commission, ESRS are a set of detailed reporting requirements for companies that apply to the Corporate Sustainability Reporting Directive (CSRD). The framework specifies the information that a company shall disclose about its material impacts, risks and opportunities in relation to environmental, social and governance matters. With an embedded double materiality approach, information disclosed under ESRS allows users of sustainability reporting to understand the reporting organizations’ material impacts on people and environment as well as the material financial impact of their sustainability matters. The WELL-ESRS alignment tool identifies identifies over 30 WELL features that can contribute to reporting on 50% of the ESRS’s requirements (36 of 70 ESRS-coded disclosure items) across the E, S and G pillars with a predominant focus on the Social part.
- The Business Responsibility and Sustainability Reporting (BRSR) framework, developed by the Securities and Exchange Board of India (SEBI), mandates sustainability disclosures for India’s top 1,000 listed companies by market capitalization. Based on IWBI’s internal review, WELL v2 may support 5 out of the 9 BRSR principles, with the strongest contributions observed across socially focused areas such as employee well-being, human rights, stakeholder engagement, and inclusive development. Overall, WELL v2 may support alignment with 42% of BRSR indicators—including 44% of essential (mandatory) and 38% of leadership (voluntary) indicators.
Follow this link for more information on WELL alignments.
How WELL can help
The International WELL Building Institute (IWBI) is a public benefit corporation on a mission to transform health and well-being in buildings, organizations and communities around the world.
In 2014, IWBI launched the WELL Building Standard (WELL), the leading tool for advancing health and well-being in buildings, communities and organizations, globally.
WELL helps organizations manage their company health as rigorously as they do their P&L, providing pathways for leaders at all levels to create spaces that prioritize employee health and well-being and to embed people-first strategies into organizational culture.
By providing a method to measure and report on human and social capital metrics, WELL makes transparent and standardized disclosure easy.