ESG refers to a framework that integrates environmental, social, and governance risks and opportunities into an organization‘s strategy. The ESG movement has quickly evolved from socially responsible investing to a global imperative, affecting not only investment decisions and shareholders but also business strategy, the global economy, and people around the world. For governments, the goal is to build long-term sustainability and achieve desired outcomes for constituents and other stakeholders. ESG includes a wide range of categories to assess the impact of a government agency‘s services and practices on the planet and society. ESG factors include: • Environmental criteria to examine how an agency performs as a steward of the natural environment • Social criteria to examine how an agency treats people, including its employees and the communities in which it serves or operates • Governance criteria to examine how an agency holds itself accountable and is governed. Defining ESG 1 Environmental, Social, and Governance: Government leadership as a catalyst for success © 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.