ESG Risk Categories
Environment
| Subcategory | Description |
|---|---|
| Atmospheric Pollution | Non-compliance or violation of laws/regulations and industry standards, leading to significant air pollution and inadvertent greenhouse gas emissions. |
| Climate Change | Misconduct in the company's climate change approach, such as inadequate climate initiatives, non-adherence to climate goals/policies, and deceptive green practices. |
| Biodiversity & Ecosystems | Actions causing harm to wildlife and plant species (including endangered species), and detrimental effects on natural ecosystem. |
| Land & Soil Pollution | Soil degradation and contamination. |
| Water Pollution | Effluent discharges and water releases. |
| Animal Welfare | Violations related to the welfare of animals, including abusive treatment. |
| Water Consumption | Excessive water consumption, overexploitation, or inefficient utilization. |
| Energy & Natural Resources Management | Excessive consumption, overexploitation, or inefficient utilization of energy and/or natural resources (excluding water). |
| Waste Management | Improper acquisition, handling, conveyance, or disposal of materials resulting in environmental contamination, health hazards, or compromising the overall security and well-being in an area. |
| Food Waste | Irresponsible disposal or discarding of edible food at retail and consumer levels. |
| Environmental Misreporting | Inaccurate or deceptive information concerning its environmental performance. |
| Industrial Accidents & Physical Risk | Events resulting in substantial environmental damage due to industrial accidents — such as chemical spills or explosions — or significant losses from extreme weather events, including floods, droughts, hurricanes, or wildfires. |
Social
| Subcategory | Description |
|---|---|
| Right to Property | Land ownership disputes, such as large-scale acquisitions and forced evictions. |
| Rights of Indigenous Communities | Adverse effects on the livelihoods or rights of protected or Indigenous communities, encompassing participation rights and control over cultural heritage. |
| Fundamental Human Rights | Any act or neglect harming human rights, across civil, political, economic, social or cultural. |
| Violation of Human Rights in Conflict or High Risk Zones | Negative human rights impacts by companies in conflict zones or highrisk areas, where risks of violence or serious abuses are elevated due to factors like political instability, institutional weaknesses, or widespread violence. |
| Diversity & Inclusion (Beyond the Workplace) | Unfair or prejudicial treatment, discrimination against individuals or groups based on race, color, sex, language, religion, political opinion, nationality, social origin, property, birth status, disability, age, marital or family status, sexual orientation, gender identity. |
| Workplace Diversity & Inclusion | Discrimination against workers based on race, age, sexual orientation or other characteristics, encompassing both sexual and non-sexual forms of harassments. |
| Freedom of Association and Collective Bargaining | Infringement on workers' rights to organize and engage in collective bargaining, whether through formal unions or informal groups. |
| Child Labor | Working activities that endanger children's mental, physical, social or moral well-being and/or disrupts their education. |
| Forced Labor | Forced labor, where individuals work under threat of penalty, coercion or more subtle means like debt manipulation, identity document retention or threats of reporting to immigration authorities (i.e modern slavery). |
| Occupational Health & Safety | Endangering employee well-being, such as illnesses or fatalities resulting from company operations or disasters and safety incidents due to inadequate training or maintenance measures. |
| Working Conditions | Violating rights or disregarding laws, regulations or contracts related to favorable work environments. |
| Social Misreporting | Company disseminates false or misleading information related to social data, such as fatality numbers or incidents of discrimination/harassment. |
| Customer Relations | Compromising client well-being through product/service failures, including illnesses, recalls, or incidents during use, as well as issues with content moderation. |
| Community Health & Safety | Adverse effects on the well-being and safety of communities, clients, customers, or other non-complicit stakeholders, including diseases and deaths linked to corporate activities or related disasters. |
Governance
| Subcategory | Description |
|---|---|
| Anticompetitive Practices | Unethical market practices, including collusion, fake transactions, and monopolization, aimed at manipulating markets. |
| Price Fixing | Unethical or illegal practices where companies collude to set prices. |
| Tax Strategy | Tax avoidance which involves employing legal methods to minimize tax obligations, or/and tax evasion which entails unlawfully reducing taxes through deception and fraudulent practices. |
| Corruption & Bribery | Practices involving the exchange of valuable items to sway or reward individuals in positions of power, whether to coerce specific actions or acknowledge past favors. |
| Money Laundering | Concealing the illicit origin of money, derived from activities such as drug trafficking, corruption, embezzlement or gambling by transforming it into seemingly legitimate funds. |
| Terrorism Financing | The act of soliciting, collecting, or providing funds with the intention of supporting terrorist acts or organizations. |
| Fraud | Intentional deception perpetrated by an organization to unlawfully obtain property or services from another party, resulting in harm. |
| Embezzlement | Misappropriation of assets by an individual entrusted with them, such as the unauthorized use of funds for personal gain. |
| Accounting & Securities Fraud | Publishing inaccurate or deceptive financial data to shareholders, investors, auditors, or regulatory bodies. This extends to deceitful activities in stock or commodities markets, including false information dissemination, stock manipulation and insider trading designed to influence investor decisions. |
| Data Privacy & Cyber Security | Breach of privacy, encompassing the unauthorized disclosure of personal information due to internal mishaps or external threats. This category also includes instances of cybersecurity lapses. |
| Executive Pay | Controversies or concerns surrounding the compensation packages and remuneration practices of top-level executives within organizations, often including aspects such as excessive compensation, lack of transparency or misalignment with company performance or stakeholder interests. |
| Marketing & Communication | Manipulating customers through misleading tactics to drive sales, often by misrepresenting products or services. This encompasses misleading advertisements, discriminatory marketing, false health claims and using ambiguous language to exaggerate product benefits. |
| Board of Directors & Senior Management | Instances where the highest levels of corporate governance and executive leadership exhibit shortcomings or lapses in their responsibilities, resulting in adverse outcomes for the organization. |
| CSR Misreporting | Instances where companies provide inaccurate or misleading information about their corporate social responsibility (CSR) efforts and impacts. |
| Supply Chain | Misconduct associated with a company's sourcing practices, such as negligence or unethical behavior in procuring materials or services. |
| Legal & Investigative Exposure | Events involving ongoing legal proceedings or active lawsuits that a company is currently facing. |