ESG (Environmental, Social, Governance)
ESG stands for environmental, social, and governance: the three categories used to assess how a company manages risks and impacts outside its financial statements. Investors, customers, and regulators use ESG data to compare companies on emissions, labor practices, board oversight, and similar factors.
The environmental pillar covers emissions, energy, water, waste, and land use. The social pillar covers employees, health and safety, human rights, and supplier practices. The governance pillar covers board composition, executive pay, ethics, and how the other two pillars are overseen.
ESG data is now a reporting duty rather than a voluntary disclosure. CSRD applies to large EU companies and many non-EU parents with EU operations. The ISSB standards are being adopted by national regulators. California requires emissions and climate risk disclosure from companies doing business in the state. Rating agencies, banks, and procurement teams also request ESG data directly, often on their own templates and schedules.
The reporting problem is rarely the framework. It is that the same underlying number has to be produced repeatedly, in different formats, with an audit trail attached each time. Emissions data is usually the hardest part because it comes from utility bills, fuel records, and supplier invoices rather than from a single system. Gravity keeps that data in one place with its source documents attached, so a figure disclosed to CDP and a figure filed under CSRD come from the same record.
Frequently asked questions
What does ESG stand for? +
ESG stands for environmental, social, and governance. The three categories cover a company's environmental impact, its treatment of people, and how it is directed and controlled.
Why do companies report ESG data? +
Regulations such as CSRD, the ISSB standards, and California SB 253 require it, and investors, lenders, and customers request it directly. The same data also supports risk management and cost reduction.
What is the hardest part of ESG reporting? +
Emissions data, because it is spread across utility bills, fuel records, and supplier invoices. Producing an auditable figure means collecting those documents, matching them to emission factors, and keeping the evidence linked to the result.
Related terms
ESG Reporting
ESG reporting is the disclosure of an organization's performance across environmental (E), social (S), and governance (G) dimensions. It encompasses GHG emissions, water and waste management, labor practices, diversity, board structure, ethics, and risk management — providing stakeholders with a holistic view of sustainability performance.
Sustainability
Sustainability is meeting present needs without reducing the ability of future generations to meet theirs. In a corporate setting it means running a business within environmental and social limits, measured against evidence rather than intent.
CSRD (Corporate Sustainability Reporting Directive)
The Corporate Sustainability Reporting Directive (CSRD) is the European Union's mandatory sustainability reporting law. It requires companies operating in the EU above certain thresholds to disclose environmental, social, and governance (ESG) information according to the European Sustainability Reporting Standards (ESRS), with third-party assurance.
ISSB (International Sustainability Standards Board)
The ISSB is a body under the IFRS Foundation that issues global sustainability disclosure standards. IFRS S1 (General Requirements) and IFRS S2 (Climate-related Disclosures) set the baseline for sustainability reporting worldwide, designed for investor-focused, financially material disclosures.
Materiality Assessment
A materiality assessment is a structured process for identifying and prioritizing the sustainability topics most relevant to an organization and its stakeholders. Under CSRD, it specifically refers to the double materiality assessment (DMA) that determines which ESRS topics require full disclosure.
Carbon Accounting
Carbon accounting is the systematic process of measuring, recording, and reporting the greenhouse gas (GHG) emissions produced by an organization, product, or activity. It follows standardized methodologies — most commonly the GHG Protocol — to quantify emissions across Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain) categories, producing an auditable inventory that underpins disclosure, reduction planning, and regulatory compliance.