Glossary

ESG (Environmental, Social, Governance)

Finance

Definition

ESG stands for Environmental, Social, and Governance-a framework for evaluating a company's or investment's impact beyond financial returns. Environmental factors include carbon emissions and climate risk; social factors include labor practices and community impact; governance factors include board composition and executive compensation. ESG investing has become mainstream, with trillions of dollars in assets managed using ESG criteria. Renewable energy investments score highly on ESG metrics: they reduce carbon emissions (environmental), create jobs and support communities (social), and are typically managed by experienced teams with strong governance. Energea's renewable energy projects deliver strong ESG returns alongside financial returns, appealing to impact investors and those seeking alignment between investments and values. Investors can track environmental impact (CO₂ reduced, homes powered) and social impact (jobs created, community benefits) directly through their Energea dashboard.