The Importance of ESG in Corporate Strategy and Investment Decisions with Patagonia as an Example

Abstract

Companies and investors are increasingly relying on environmental, social and governance factors to address long-term sustainability and ethical implications, and ESG is a non-financial criterion for assessing these factors, mainly applied to assess the current status of corporate social responsibility, environmental governance and other aspects. This paper uses the various methods of ESG assessment and provides a brief introduction before using Patagonia, an American outdoor clothing and equipment company, as a study of environmental and social responsibility, where several measures are taken to reduce corporate governance and ensure social justice. The final in-depth study found that it is particularly important for companies to prioritize ESG. Firstly, ESG increases the level of engagement with stakeholders, enhances the reputation of the company's brand and ultimately leads to improved financial performance, and with climate change and social inequality practices occurring regularly, it is now imperative that companies seize the opportunity to create a more sustainable society.