Business Practices and Ethics Practice Test

ESG reporting concentrates on Environmental, Social, and Governance metrics measured with quantified indicators that reveal how a company manages risks and creates long-term value for investors. This investor-focused approach is what sets it apart from CSR and broader sustainability reporting. CSR tends to emphasize voluntary social contributions and philanthropic activities, while sustainability reporting can cover a wider range of environmental, social, and economic impacts without the same emphasis on standardized, decision-useful metrics for investors. Examples of ESG metrics include environmental indicators like greenhouse gas emissions, energy and water use, and waste; social indicators such as diversity and inclusion, employee safety, and labor practices; and governance indicators like board independence, risk management, and executive compensation. The other options relate to activities that aren’t central ESG measures, such as fundraising and donations, customer satisfaction, or product pricing strategies.