Understanding Business Activity Impact in ESG

Business activity impact is about the current movement in measuring the performance of a company from the lens of ESG. It is different from the normal measure, which reflects the tangible effects of a company's activities in reality and reflects a total picture of a company's sustainability.

What is Business Activity Impact?

Business activity impact is the analysis of the entire life cycle of a business's revenue-generating activities as to determine both direct and indirect influences on the environment, societies, and governance bodies. By analyzing such impacts, investors are in a better position to understand how sustainable company operations are.

Major Features of Business Activity Impact:

Lifecycle Assessment: Measuring the total lifecycle of products and services, from raw material extraction to waste management in terms of environmental and social impacts.

Comprehensive Metrics: Making use of a variety of indicators measuring the impacts of business activities on biodiversity, resource use, and social wellbeing.

Impact Analysis: Identifies and quantifies both the positive and negative effects to present a balanced view of company sustainability performance.

Consider transparency and accountability. There should be disclosure of aspects of business activities for companies regarding the impacts to facilitate transparency and accountability.

Why does the Impact of Business Activity Matter?

This strategy helps the investor understand the overall impact of a company's business activity on society. The method by which this approach works is through focusing investors on companies that are able to show true commitment towards sustainability and responsible business practices. It allows them to take more informed decisions for supporting companies that contribute positively to the society and the environment.