Which component of ESG aims to improve the working conditions and rights of employees?

The component of ESG that focuses on improving the working conditions and rights of employees is the Social aspect. This dimension encompasses a range of issues related to labor practices, employee relations, diversity and inclusion, and community engagement. By prioritizing social factors, organizations aim to create a safe and fair work environment, uphold human rights, and foster positive relationships with employees and stakeholders.

For instance, the Social component addresses concerns such as ensuring fair wages, providing workplace safety, promoting employee welfare, and respecting labor rights. Organizations that emphasize these values often see improved employee satisfaction and retention, as well as enhanced overall company reputation.

The other components—Environmental and Governance—while important for sustainability and ethical oversight, do not specifically focus on the rights and working conditions of employees. The Economic component, though related to financial performance, does not inherently address social issues directly related to workers' rights and conditions.