Certified Environmental Social and Governance Analyst (CESGA) EFFAS Practice Test 2025 - Free CESGA Practice Questions and Study Guide

The correct response is centered on the Social aspect of ESG. This dimension specifically deals with the relationships a company maintains with its employees, suppliers, customers, and the communities in which it operates. Social criteria examine how a business manages its interactions and impacts regarding human rights, labor standards, community development, and stakeholder engagement.

Human rights issues might involve child labor, forced labor, labor rights, and employee welfare, while community impacts pertain to how a company's operations affect local communities, including health, safety, and social equity. By focusing on these issues, the Social aspect seeks to assess whether a company acts responsibly and ethically in terms of its social footprint.

The Environmental aspect primarily addresses a company's impact on the natural environment, involving considerations like pollution, sustainability, and the utilization of natural resources. Governance relates to the frameworks, practices, and processes that control and direct a company, focusing on corporate ethics, compliance, and board diversity. Economic factors are often tied to financial performance, market trends, and economic influence, which are outside the direct scope of community and human rights considerations.