Corporate ESG: The Sustainable Blueprint for Responsible Enterprise

By: Hali Udenasuta

Balancing Stakeholder Value, Social Equity, and Ecological Responsibility

ESG, or Environment, Social, and Governance, is a set of guidelines that outline how a company operates, helping stakeholders understand the related risks and opportunities from an ESG perspective. 

ESG is crucial for investors who prioritize aligning their values with those of the company, in addition to analyzing the company’s financial value. By encouraging transparency, ethical practices among businesses, and nurturing the average consumer to favour sustainable products, ESG influences the choices we make and the trust we put into a company.

ESG is broken down into three sections. The ‘E’ in ESG holds companies accountable for their utilization of natural resources, the company’s effects on the environment, which includes direct operations and beyond their supply chains (S&P Global). It also covers issues like climate change, greenhouse gases, water pollution, waste, etc. Companies can adopt ESG not only to be sustainable and responsible in the short term but also for the long run.

The ‘S’ controls the Social aspect of ESG, which focuses on how companies handle people, employees, customers, and the community. This includes human rights, equity, policy in labour, etc. This dimension is a major role a company can take to gain trust due to the display of its reputation and how the company treats people connected to it. 

The ‘G’ in ESG indicates Governance. This pillar focuses on structures, systems, and leadership practices that ensure the responsibility of a company. Corporate Governance involves anti-corruption, business structures, ethics, etc. Governance ensures that both environmental and Social aspects are backed by accountability and quality leadership.

Corporate ESG is measured by a score (out of 100 or letter grade) that measures the big three in ESG, which is calculated by security filings, corporate disclosure (voluntary), governmental databases, media reports, etc. The methodology can be calculated in two ways: a Qualitative approach, which involves information through data from different sources, and a Quantitative ESG, which is public information released by the firm. ESG scores are calculated by research, analysis firms, and agencies that are third-party entities that review the scores. 

Challenges in ESG scores include the lack of standardization, which provides inconsistent ratings, making it difficult for investors and stakeholders to make a fair comparison. 

Some companies like Patagonia is pushing through the setback by displaying the big three in their core business model, seizing opportunities in challenges. Patagonia focuses on recycling, growing cotton organically, changing resource growth, caring for workers proving their value in ESG. 

ESG matters for everyone. As consumers, students, and future leaders, through the choices we make, the products we buy, and which companies we trust, we can all influence corporate behaviour. Understanding the concept of ESG in depth can ensure that businesses prosper not only financially but ethically and sustainably. 

image from corporate finance institute, (Peterdy)

Works Cited

Peterdy, Kyle. “ESG (Environmental, Social, & Governance).” Corporate Finance Institute, 16 May 2025, corporatefinanceinstitute.com/resources/esg/esg-environmental-social-governance/. Accessed 29 Aug. 2025.

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Byrne, Dan. “What Is ESG and Why Is It Important?” The Corporate Governance Institute, 6 Mar. 2024, www.thecorporategovernanceinstitute.com/insights/guides/what-is-esg-and-why-is-it-important/?srsltid=AfmBOoqgl_3QH5JqaCucYMONoWHamNdKhD6H2kUKSVjT-TjiZ6TWrCdc. Accessed 29 Aug. 2025.

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Peterdy, Kyle. “ESG (Environmental, Social, & Governance).” Corporate Finance Institute, 16 May 2025, corporatefinanceinstitute.com/resources/esg/esg-environmental-social-governance/. Accessed 29 Aug. 2025.

‌“Understanding the ‘E’ in ESG.” S&P Global, 2019, www.spglobal.com/en/research-insights/market-insights/understanding-the-e-in-esg. Accessed 29 Aug. 2025.

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“ESG 101: What Does Social in ESG Mean?” Onetrust.com, 2024, www.onetrust.com/blog/esg-101-what-does-social-in-esg-mean/. Accessed 30 Aug. 2025.

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“It’s Time to Focus on the ‘G’ in ESG.” Harvard Business Review, 18 Nov. 2022, hbr.org/2022/11/its-time-to-focus-on-the-g-in-esg. Accessed 30 Aug. 2025.

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kumar, anil. “What Is an ESG Score and How to Calculate ESG Score?” SG Analytics, 14 Jan. 2024, www.sganalytics.com/blog/what-is-esg-score-and-how-is-it-calculated/. Accessed 30 Aug. 2025.

‌“Environmental & Social Footprint | Patagonia.” Patagonia.com, 2022, www.patagonia.com/our-footprint/#:~:text=As%20of%202023%2C%2034%25%20of,Nevada%2C%20repair%20center%20in%202024. Accessed 30 Aug. 2025.