The ESG framework originated in the early 2000s, notably with the UN Principles for Responsible Investment (PRI) launched in 2006. It built upon earlier sustainability and corporate social responsibility (CSR) theories developed by Elkington (1994) with the Triple Bottom Line—People, Planet, Profit. ESG represents the convergence of ethical finance, stakeholder theory (Freeman, 1984), and sustainability management, expanding the scope of corporate performance beyond financial metrics to include environmental impact, social equity, and governance ethics.

Environmental, Social, and Governance (ESG) refers to the three core dimensions that define a company’s non-financial performance and accountability:

• Environmental (E): how the organization manages its ecological footprint, resource consumption, emissions, and climate-related risks.

• Social (S): how it treats employees, customers, suppliers, and communities, emphasizing human rights, diversity, and stakeholder well-being.

• Governance (G): how the company is led and controlled, focusing on ethics, transparency, board diversity, and anti-corruption policies.

ESG has evolved from a reporting framework into a strategic paradigm, guiding investment decisions, brand reputation, and risk management. In contemporary management, ESG aligns with the movement toward Impact Marketing and Enlightened Management, where companies are judged by their contribution to sustainable prosperity.

Institutional investors use ESG scores from agencies such as MSCI or NeXt Index ESG to evaluate corporate sustainability. Companies like Unilever and Patagonia integrate ESG goals into strategy—reducing emissions, fostering inclusion, and ensuring ethical governance—to attract both investors and conscious consumers.