Skip to content
ESG Now
Start free

ESG glossary

ESG

ESG stands for environmental, social and governance. It is a way of describing how a business affects the planet, how it treats people, and how well it is run.

ESG is shorthand for three groups of questions investors, customers and lenders ask about a business. It started in the investment world as a way to judge risks that do not show up in the accounts, and it has since spread down supply chains to businesses of every size.

What it means for a small business

For a small firm, each letter boils down to something practical:

  • Environmental. Your energy use, vehicles, travel, waste and water, usually summarised as a carbon footprint.
  • Social. How you treat your people and community: pay, training, health and safety, diversity, volunteering and data protection.
  • Governance. How the business is run: who makes decisions, written policies like a code of conduct, how you manage risk and choose suppliers.

Nobody expects a ten-person firm to report like a listed company. What buyers and funders want is a clear, honest picture, with numbers where numbers matter and evidence that you are moving in the right direction. Our guide to what ESG means for a small business goes into more detail.

An example

A 15-person design agency in a rented office might describe its ESG like this. Environmental: 11,000 kWh of electricity a year on a renewable tariff, a handful of rail trips and two short-haul flights, giving a footprint of a few tonnes of CO2e. Social: everyone paid at least the Real Living Wage, a training budget per person and a written health and safety policy. Governance: two directors, a code of conduct and an environmental policy, both reviewed annually.

That is a perfectly good ESG profile for a business of that size, and it fits on a page.

How ESG Now handles it

The ESG Now questionnaire works through all three areas in plain English, from energy and travel to workforce, community, policies and leadership. It turns your answers into a shareable ESG report and a private action plan, which shows which policies you already have in place and which are worth adding next. Your first report is free. See how it works or check our ESG checklist for SMEs to see what you already have in place.

Guides that cover this