What?
The Environmental, Social and Governance (ESG) Assessment provides an opinion on an organization’s systems and practices related to Environmental, Social and Governance aspects.
Why?
The ESG Assessment evaluates how sustainability and responsible practices are integrated into governance, management and operations of the organization and its supply chain. This Assessment enables organizations to strengthen their capacity to effectively monitor, evaluate, and improve its practices and performance in Environmental, Social, and Governance (ESG) dimensions.
Who?
The ESG Assessment is applicable to non-financial companies and financial institutions that are not focused on microfinance or financial inclusion, such us commercial banks and consumption-loan focused banks. It is not applicable for financial institutions focused on financial inclusion.
How it works?
The ESG Assessment evaluates three dimensions—Environmental, Social, and Governance—as core sections of the assessment:
- Governance and Strategic Capacity: This first section examines the organization’s governance and strategic capacity. Governance bodies define the ESG strategic goals and risk appetite, as well as social and environmental strategies to achieve them.
- Social performance and Stakeholder Management: The second section analyses the organization’s social performance and stakeholder engagement.
- Environmental Performance and Stewardship: The third section focuses on the organization’s environmental performance and management.
Additionally, the Assessment is based on globally used and recognized performance standards on Environmental, Social and Governance (ESG) dimensions, including:
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- UN Global Compact: Ten Principles on corporate sustainability in the areas of human rights, labour, environment, and anti-corruption.
- World Economic Forum ESG Core Metrics: Derived from GRI and SASB Standards, focusing in: People, Planet, Prosperity, and Principles of Governance.
- IFC Environmental and Social Management Systems (ESMS): For risks and impacts assessment.
- IFC Corporate Governance Methodology: Provides standards to evaluate corporate governance of companies.
- OECD Guidelines for Multinational Enterprises: Provides standards to support enterprises minimizing the negative impact of their operations on corporate, social, environmental, and labour dimensions.
- ILO International Labour Standards: Sets comprehensive guidelines and standards on all dimensions related to labour.
Process
