Differences between "Sustainability" and "ESG"

Updated: Nov 1

While the terms "sustainability" and "ESG" are often used interchangeably, they represent distinct but related concepts.

Little summary breakdown of their differences:

1. Sustainability

Definition: Sustainability is a broad concept referring to the ability to maintain or endure something over the long term.
In a business context, it involves meeting present needs without compromising the ability of future generations to meet their own needs. It encompasses environmental, social, and economic dimensions, often referred to as "people, planet, and profit".
Focus: Sustainability is about the long-term interplay of environmental, social, and economic factors. It emphasizes maintaining ecosystem balance, promoting social equity, and ensuring economic viability.
Scope: Sustainability is a broader concept. Sustainable development focuses mainly on human well-being.
Main famous key frameworks: GRI, UN SDGs

2. ESG (Environmental, Social, and Governance)

Definition: ESG stands for Environmental, Social, and Governance. It's a set of criteria or standards used to measure an organization's environmental and social impact.
Focus: ESG is primarily used in the private financial and investment sectors to assess the sustainability and ethical impact of companies and their operations. It provides a structured way to evaluate non-financial risks and opportunities.
Scope: ESG is more tangible and encompasses the data and metrics needed to inform decision-making for companies and investors.
ESG is usually used in the context of investing and finance and it is used to make the company's performance measurable and comparable.
Main famous key frameworks: SASB, TCFD, CDP