Environmental, social, and corporate governanceEnvironmental, social, and corporate governance (ESG), also known as environmental, social, and governance, is a set of aspects considered when investing in companies, that recommends taking environmental issues, social issues and corporate governance issues into account. Since 2020, there have been accelerating incentives from the United Nations (UN) to overlay ESG data with the Sustainable Development Goals (SDGs), based on their work, which began in the 1980s.
Socially responsible investingSocially responsible investing (SRI), social investment, sustainable socially conscious, "green" or ethical investing, is any investment strategy which seeks to consider both financial return and social/environmental good to bring about social change regarded as positive by proponents. Socially responsible investments often constitute a small percentage of total funds invested by corporations and are riddled with obstacles. Recently, it has also become known as "sustainable investing" or "responsible investing".
GovernanceGovernance is the process of making and enforcing decisions within an organization or society. It is the process of interactions through the laws, social norms, power (social and political) or language as structured in communication of an organized society over a social system (family, social group, formal or informal organization, a territory under a jurisdiction or across territories). It is done by the government of a state, by a market, or by a network.
Cost of capitalIn economics and accounting, the cost of capital is the cost of a company's funds (both debt and equity), or from an investor's point of view is "the required rate of return on a portfolio company's existing securities". It is used to evaluate new projects of a company. It is the minimum return that investors expect for providing capital to the company, thus setting a benchmark that a new project has to meet. For an investment to be worthwhile, the expected return on capital has to be higher than the cost of capital.
Cost curveIn economics, a cost curve is a graph of the costs of production as a function of total quantity produced. In a free market economy, productively efficient firms optimize their production process by minimizing cost consistent with each possible level of production, and the result is a cost curve. Profit-maximizing firms use cost curves to decide output quantities. There are various types of cost curves, all related to each other, including total and average cost curves; marginal ("for each additional unit") cost curves, which are equal to the differential of the total cost curves; and variable cost curves.
Weighted average cost of capitalThe weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Importantly, it is dictated by the external market and not by management. The WACC represents the minimum return that a company must earn on an existing asset base to satisfy its creditors, owners, and other providers of capital, or they will invest elsewhere.
Marginal costIn economics, the marginal cost is the change in the total cost that arises when the quantity produced is incremented, the cost of producing additional quantity. In some contexts, it refers to an increment of one unit of output, and in others it refers to the rate of change of total cost as output is increased by an infinitesimal amount. As Figure 1 shows, the marginal cost is measured in dollars per unit, whereas total cost is in dollars, and the marginal cost is the slope of the total cost, the rate at which it increases with output.
Shareholder valueShareholder value is a business term, sometimes phrased as shareholder value maximization. It became prominent during the 1980s and 1990s along with the management principle value-based management or "managing for value". The term "shareholder value", sometimes abbreviated to "SV", can be used to refer to: The market capitalization of a company; The concept that the primary goal for a company is to increase the wealth of its shareholders (owners) by paying dividends and/or causing the stock price to increase (i.
Sustainable agricultureSustainable agriculture is farming in sustainable ways meeting society's present food and textile needs, without compromising the ability for current or future generations to meet their needs. It can be based on an understanding of ecosystem services. There are many methods to increase the sustainability of agriculture. When developing agriculture within sustainable food systems, it is important to develop flexible business process and farming practices.
Sustainable developmentSustainable development is an organizing principle that aims to meet human development goals while also enabling natural systems to provide necessary natural resources and ecosystem services to humans. The desired result is a society where living conditions and resources meet human needs without undermining the planetary integrity and stability of the natural system. Sustainable development tries to find a balance between economic development, environmental protection, and social well-being.
SustainabilitySustainability is a social goal for people to co-exist on Earth over a long time. Specific definitions of this term are disputed and have varied with literature, context, and time. Experts often describe sustainability as having three dimensions (or pillars): environmental, economic, and social, and many publications emphasize the environmental dimension. In everyday use, sustainability often focuses on countering major environmental problems, including climate change, loss of biodiversity, loss of ecosystem services, land degradation, and air and water pollution.
Global governanceGlobal governance refers to institutions that coordinate the behavior of transnational actors, facilitate cooperation, resolve disputes, and alleviate collective action problems. Global governance broadly entails making, monitoring, and enforcing rules. Within global governance, a variety of types of actors – not just states – exercise power. Governance is thus broader than government. Global governance began in the mid-19th century. It became particularly prominent in the aftermath of World War I, and more so after the end of World War II.
Sustainable dietSustainable diets are "dietary patterns that promote all dimensions of individuals’ health and wellbeing; have low environmental pressure and impact; are accessible, affordable, safe and equitable; and are culturally acceptable". These diets are nutritious, eco-friendly, economically sustainable, and accessible to people of various socioeconomic backgrounds. Sustainable diets attempt to address nutrient deficiencies (e.g., undernourishment) and excesses (e.g.
EntrepreneurshipEntrepreneurship is the creation or extraction of economic value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values than simply economic ones. An entrepreneur is an individual who creates and/or invests in one or more businesses, bearing most of the risks and enjoying most of the rewards. The process of setting up a business is known as "entrepreneurship".
Sustainable food systemA sustainable food system is a type of food system that provides healthy food to people and creates sustainable environmental, economic, and social systems that surround food. Sustainable food systems start with the development of sustainable agricultural practices, development of more sustainable food distribution systems, creation of sustainable diets, and reduction of food waste throughout the system. Sustainable food systems have been argued to be central to many or all 17 Sustainable Development Goals.
Multistakeholder governanceMultistakeholder governance is a practice of governance that employs bringing multiple stakeholders together to participate in dialogue, decision making, and implementation of responses to jointly perceived problems. The principle behind such a structure is that if enough input is provided by multiple types of actors involved in a question, the eventual consensual decision gains more legitimacy, and can be more effectively implemented than a traditional state-based response.
Environmental governanceEnvironmental governance (EG) consist of a system of laws, norms, rules, policies and practices that dictate how the board members of an environment related regulatory body should manage and oversee the affairs of any environment related regulatory body which is responsible for ensuring sustainability (sustainable development) and manage all human activities—political, social and economic. Environmental governance includes government, business and civil society, and emphasizes whole system management.
Sustainable gardeningSustainable gardening includes the more specific sustainable landscapes, sustainable landscape design, sustainable landscaping, sustainable landscape architecture, resulting in sustainable sites. It comprises a disparate group of horticultural interests that can share the aims and objectives associated with the international post-1980s sustainable development and sustainability programs developed to address that humans are now using natural biophysical resources faster than they can be replenished by nature.
Sustainable designEnvironmentally sustainable design (also called environmentally conscious design, eco-design, etc.) is the philosophy of designing physical objects, the built environment, and services to comply with the principles of ecological sustainability and also aimed at improving the health and comfort of occupants in a building. Sustainable design seeks to reduce negative impacts on the environment, the health and well-being of building occupants, thereby improving building performance.
Valuation (finance)In finance, valuation is the process of determining the value of a (potential) investment, asset, or security. Generally, there are three approaches taken, namely discounted cashflow valuation, relative valuation, and contingent claim valuation. Valuations can be done for assets (for example, investments in marketable securities such as companies' shares and related rights, business enterprises, or intangible assets such as patents, data and trademarks) or for liabilities (e.g., bonds issued by a company).
