ESG Explained

ESG vs Sustainability vs Corporate Governance

ESG, sustainability and corporate governance are related but not identical. Understanding the difference helps boards and executives govern these topics more effectively.

What is sustainability?

Sustainability focuses on long-term environmental, social and economic resilience. It asks how organisations can operate in ways that protect resources, people and future value.

What is ESG?

ESG is often used by investors, regulators and stakeholders to assess how organisations manage environmental, social and governance factors that may affect performance, risk and trust.

What is corporate governance?

Corporate governance refers to the systems, structures, processes and practices used to direct and control an organisation. ESG should be governed through these structures.

How they work together

Sustainability describes the broader objective, ESG provides a practical lens for assessing and reporting key issues, and governance provides the oversight and accountability needed to manage them.

Next step

Help your leaders understand ESG in practical governance terms.

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