Female engineer checking quality of water as part of her ESG strategy.

What Does ESG Mean and Why Should You Prioritize ESG Strategy?

As the world changes, success in business is no longer measured in financial profit alone but also in sustainability, growth, and contribution to the environment and society. Businesses must adapt to the new world to stay relevant and competitive. Investors, customers, and stakeholders are increasingly measuring the worth of organizations based on their Environmental, Social, and Corporate Governance (ESG) performance. Aligning and incorporating environmental, social, and corporate governance factors into business goals can help businesses determine the organization’s sustainability goals and ethical impact.

What is ESG?

ESG stands for environmental, social, and corporate governance, the three areas of focus for socially conscious investors. Instead of thinking about their profit, socially conscious investors and stakeholders believe it’s necessary to include their principles in their investments. The ESG framework considers the effects of variables like sustainability, equality, and others while making investing decisions.


The “E” in ESG refers to the environmental policy of the organization. This includes energy and resources consumption and waste discharges including carbon emissions and other factors contributing to climate change. It also investigates how organizations can reduce the adverse impact on the environment by finding better ways for waste management, and maintaining air quality, water quality and biodiversity.


Since every organization functions within a broad and diverse society, the social policy ensures that the company fosters a healthy relationship with employees and stakeholders and includes diversity, equity, and inclusion. The social aspect of ESG also includes labor relations which maintains the company’s reputation.


Every company requires governance and increasing regulations imply extra efforts to meet compliance. Corporate governance is the part of ESG that deals with the internal practices, procedures, and controls that organizations use to make informed decisions, ensure compliance with regulations, and satisfy stakeholders. This covers executive compensation, transparency, cybersecurity policies and practices, data quality and privacy, and organizational structure, among other things.

Why is ESG Important?

ESG initiatives are necessary to ensure growth by attracting customers through more sustainable products and practices which strengthen community and government relations. Reduced energy and water consumption implies a corresponding decrease in costs. With ESG initiatives, the organization is already complying with regulations and can earn government subsidies and other support. Social credibility can lead to attracting better talent and boosting motivation of existing employees which can in turn lead to increased productivity. Finally, capital investments can be allocated for more sustainable projects ensuring promising returns to investors.

How ServiceNow Can Help with ESG Initiatives

You can manage all ESG commitments centrally with the help of the ServiceNow Environmental, Social, and Governance Management application introduced in the Tokyo release of ServiceNow. The tool also monitors and reports progress of your ESG initiatives.

The ServiceNow ESG Management application makes following tasks easy.

  • Create an ESG program which includes all relevant subjects, objectives, activities, and emission factors
  • Define metrics to start manually and automatically collecting data for an enterprise wide ESG program
  • Create disclosures for internal and external stakeholders
  • Use content packs like the Sustainability Accounting Standards Board (SASB) or the Global Reporting Initiative (GRI) Content Accelerator for ESG frameworks

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