Today’s investment climate has changed and, in many ways, for the better. The phrase known as “ESG” has emerged and quickly risen to the top of many investor due diligence checklists. For those unfamiliar with ESG, it stands for Environmental, Social, and Governance and acts as a set of ethical principles and best practices that apply to companies in every industry.
While this is the first time we have publicly discussed this topic, practicing good corporate citizenship is not new to Five States. In fact, it has always been a part of who we are and what we do. Our practices, ethical standards, transparency, and reputation have been interwoven with our firm’s 36-year history of success.
- Environmental factors: Performance of a business within the broader, shared natural environment. Criteria include the use of renewable energy resources, setting policies and procedures surrounding waste management and pollution, compliance with environmental regulations and reporting, and generally minimizing environmental liabilities.
- Social factors: How a business operates with its employees, business partners, and the community. Criteria include workplace policies regarding diversity, inclusion, and prevention of sexual harassment. Other examples on which companies are reporting include workplace health and safety, employee volunteer work, fair and equal pay practices, and data protection and privacy.
- Governance factors: The adherence to basic business standards and having processes/systems in place to monitor compliance with laws and regulations. Criteria in this category can include board and management composition, avoiding conflicts of interest or political contributions, audit committee structure, and the use of accurate and transparent accounting methods.
ESG is in our DNA
While this is the first time we have publicly discussed this topic, practicing good corporate citizenship is not new to Five States. In fact, it has always been a part of who we are and what we do. Our practices, ethical standards, transparency, and reputation have been interwoven with our firm’s 36-year history of success.
We look forward to sharing more details about our operations and our commitment to ESG in future issues of The Producer.