ESG (Environmental, Social, and Corporate Governance)refers to the three core factors used to evaluate a company's sustainability and ethical impact.

ESG is now akey part of risk management, influencinginvestment decisions, regulatory compliance, and corporate strategy.

Environmental (E): Climate change, carbon emissions, resource management.

Social (S): Diversity & inclusion, labor rights, community engagement.

Governance (G): Board structure, executive pay, corporate ethics.

Option A ("Environmental, Strategy, and Corporate Governance")

Incorrect becauseStrategy is not part of ESG.

Option C ("Enhanced Social Governance")

Incorrect because ESGcovers more than just social governance.

Option D ("Extra Social Governance")

Incorrect as it does not align with the recognized ESG definition.

Step 1: Definition of ESGStep 2: Breakdown of ESG ComponentsStep 3: Why the Other Options Are Incorrect

PRMIA ESG Risk Management Guidelines– Defines ESG factors as Environmental, Social, and Governance.

PRI (Principles for Responsible Investment)– Aligns ESG with financial risk management.

PRMIA Risk References Used: