Walmart, Goldman Sachs & CDP: What does ESG really mean?
ESG is a framework used to assess a company’s ethical impact, which covers three areas: environmental, social and governance.
Environmental standards measure the impact on the environment, looking at carbon emissions, pollution, climate change and waste management.
The social aspect analyses how labour practices, community involvement, diversity and human rights impact society.
Governance refers to a company’s decision-making processes and management, board composition, shareholders and transparency.
The difference between ESG, CSR and sustainability
ESG is often used interchangeably with CSR and sustainability, however they are distinct terms.
ESG looks at responsibility as measurable risk and opportunity where companies are judged by metrics including energy use, emissions and labour practices.
CSR, or corporate social responsibility, is a company’s voluntary commitment to act ethically and contribute to society.
It can also include environmental or social initiatives, but it has a focus on legal compliance and is used to build trust with stakeholders.
Sustainability includes scientific targets and covers all aspects of a company’s operations throughout the supply chain.
Companies’ net zero emissions targets often fall under sustainability, but can incorporate elements of ESG or CSR.
How CDP measures ESG
CDP is an organisation that measures companies’ ESG by creating ratings based on environmental performance and disclosure.
It provides assistance to help companies manage their environmental impacts and improve their ESG ratings.
The ratings encourage transparency by creating a comprehensive environmental disclosure database for companies to use.
More than 24,800 companies disclose environmental data through CDP, which has regional offices and local partners in 50 locations globally.
Walmart’s ESG commitments
Walmart prioritises ESG by creating value for stakeholders, which benefits customers, associates and business partners.
It aims to enhance the financial wellbeing of its associates by offering competitive wages and benefits, paid leave and flexible schedules.
It provides the option of affordable health coverage through the company and free mental health services for associates and their families.
Walmart focuses on governance at every stage of its operations, ensuring climate resilience and that energy and emissions strategies are appropriately managed.
It aims to power 100% of its global operations with renewable sources of energy by 2035, by analysing risks to help work towards its goals.
The retailer serves communities by increasing access to affordable healthy food, investing in local suppliers and providing resources to community organisations.
This aims to create an environment of accountability, transparency and trust in the business, promoting integrity, financial stability and responsible long-term growth.
Kathleen McLaughlin, Executive Vice President and Chief Sustainability Officer at Walmart, says: “Our purpose - saving money so they can live better - guides everything we do.
“We strive to fulfill our purpose in ways that create shared value - delivering business performance by creating value for our customers, associates, suppliers, communities and the planet.”
Goldman Sachs’ 10,000 Women initiative
Goldman Sachs offers ESG investment solutions to its clients and manages the environmental and social risks of its own operations.
It has a target to use US$150bn in clean energy financing and investments by 2025.
It launched 10,000 Women in 2008, which is a global initiative designed to help grow local economies.
The project aims to bring about greater shared prosperity and social change by providing business and management education to underserved women entrepreneurs.
It is inspired by research that shows investing in women’s education can help foster long-term economic growth.
Goldman Sachs has launched an online business course to help make education more accessible to women across the world.
Charlotte Keenan, Global Head of 10,000 Women at Goldman Sachs, says: “In response to the incredible strain that small businesses face right now, we are releasing our online course more broadly.
“Goldman Sachs is committed to ensuring that small businesses globally have the support they need to thrive.”
