ESG criteria explained: examples and indicators for Swiss businesses
ESG criteria cover environmental, social and governance issues. Their value depends on the topics selected, clear definitions and reliable data. Learn what to measure, how to explain the figures and how to connect them with business decisions.
By Sarah Prieur · Swiss certified accountant
What do ESG criteria mean?
ESG stands for environmental, social and governance. These three dimensions group criteria used to assess an organisation's practices, risks or impacts. They can support management decisions, customer requests, financing assessments and reporting.
There is no single set of ESG indicators suitable for every business. Selection depends on the sector, activities, reporting boundary and decision being made. A measure that matters to a water-intensive manufacturer may not be a priority for a small service company.
| Dimension | Example topics | Possible information |
|---|---|---|
| Environmental | Climate, energy, water, resources and biodiversity | Consumption, emissions, waste and site impacts |
| Social | Working conditions, health, safety and human rights | Workforce figures, incidents, training and supplier practices |
| Governance | Responsibility, ethics, controls and transparency | Decision-making, control operation and handling of concerns |
Explain the methodology behind each indicator. A number without a boundary or reporting period may be easy to display but impossible to interpret.
Which environmental criteria can a business monitor?
The environmental dimension considers resources used and the effects of operations on the environment. Relevant topics may include greenhouse gas emissions, energy, water, waste and biodiversity.
Energy consumption and emissions are different measures
Electricity consumption is commonly measured in kWh. Greenhouse gas emissions are generally expressed in CO₂ equivalent, using an appropriate method and conversion factors. The amount paid in Swiss francs is a third, different measure.
Do not improvise the conversion. Emission factors, location, period and the chosen framework affect the calculation. A lower bill may simply reflect a cheaper tariff rather than reduced consumption.
What are scopes 1, 2 and 3?
Under the GHG Protocol, scopes distinguish the origin of emissions. Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers emissions associated with the relevant purchased energy. Scope 3 covers other indirect value-chain emissions within the applicable categories.
This helps avoid limiting the assessment to the building the company occupies. Purchasing, transport and product use may matter, depending on the business. Organisational and operational boundaries still need clear definitions.
Compare absolute amounts with intensity measures
A company can reduce emissions per unit while increasing total emissions if production grows strongly. The two indicators answer different questions.
Illustrative example: 100 tonnes of CO₂ equivalent for 1,000 units gives 0.10 tonnes per unit. The following year, 108 tonnes for 1,200 units gives 0.09 tonnes per unit. Emissions intensity falls by 10%, while absolute emissions rise by 8%.
Showing only the intensity improvement would leave an incomplete picture. Boundaries and methods must also be comparable across years.
Which social criteria are relevant?
The social dimension can concern employees, workers in the value chain, customers and affected communities. It goes beyond the number of jobs created.
For an SME, relevant topics may include health and safety, training, working conditions, discrimination prevention and supplier practices. Priorities depend on actual exposure and applicable obligations.
Define the population precisely
A staff turnover rate requires clear definitions of departures, the reference workforce and period. Are temporary contracts ending included? Is the denominator average headcount or headcount at a particular date?
Average training hours may relate to all employees, participants only or full-time equivalents. Those choices change the result and should match any reporting framework used.
Measure actions and outcomes
The number of training sessions measures an activity; it does not prove a risk has disappeared. Safety incidents, near misses and corrective action can provide additional evidence.
An increase in reports of concerns is not necessarily deterioration. It may reflect a reporting channel that staff now understand and trust. Interpret the numbers alongside facts and procedural changes.
Protect personal information
Social indicator collection must respect confidentiality and applicable data protection requirements. In a small team, a detailed breakdown may identify an individual even without naming them.
Define access rights, purposes and the appropriate level of aggregation. Reporting should not create unnecessary disclosure of sensitive information.
What does governance cover in ESG?
Governance concerns how a business is directed, controlled and held accountable for decisions. It includes responsibility, conflicts of interest, ethical practices and internal controls.
A small business does not need to copy every committee and process of a listed group. It does need clear responsibilities and decisions that can be traced.
Examples of practical controls
Separating payment preparation from approval can reduce certain error and fraud risks. Reviewing transactions with people close to management helps document conflicts of interest. A whistleblowing process should specify who receives concerns and how they are handled.
An indicator should assess whether a process operates, rather than simply whether a document exists. A written procedure does not show that controls are performed and exceptions corrected.
The connection with financial information quality
Well-organised accounting supports controls and traceability. It does not eliminate governance risk by itself, but provides an important basis for explaining transactions.
Measures might track completed reviews, resolved exceptions or updated access rights. Select them according to the business's actual risks and build them into the accounting cycle where appropriate.
How many ESG indicators should you use?
Start with significant issues and the information recipients need. A list of fifty indicators copied from another industry may create work without improving decisions.
Distinguish impact and financial materiality
Impact materiality considers the organisation's effects on people and the environment. Financial materiality addresses risks and opportunities that may affect its financial position and prospects.
Some frameworks combine both perspectives. Identify the framework used rather than assuming all ESG analysis measures the same thing. GRI Standards and IFRS Sustainability Disclosure Standards serve different, potentially complementary purposes.
Create an indicator dictionary
For every measure, record its name, definition, unit, period, boundary, owner and supporting evidence. Include limitations and estimates.
| Field | Electricity consumption example |
|---|---|
| Boundary | Two identified offices, excluding premises not occupied by the business |
| Unit | kWh |
| Period | Complete calendar year |
| Source | Supplier readings and invoices |
| Missing data | Documented estimates identified separately |
| Owner | Function responsible for collecting and approving the data |
This is an illustrative management approach. A reporting framework or legal obligation may require additional information.
Connect each indicator with a decision
What happens if the figure deteriorates? Will it trigger a review, an investment assessment or a reassessment of supplier practices?
Without an answer, the indicator risks becoming decorative. Connect the measures with the actions and decisions in the company's corporate responsibility programme.
Use the data without overstating what it shows
A published figure should be accurate within its stated boundary and adequately explained. Disclose methodological changes, acquired sites and corrections to prior data. A comparison without that context may mislead.
Swiss reporting obligations depend on specific legal provisions and eligibility criteria. European rules also changed in 2026. A customer questionnaire is not proof that every requested disclosure is legally mandatory for your SME.
An indicator is not an overall score
A business may improve in one area while struggling in another. Combining different dimensions requires a weighting method that should be explained.
Different providers' ESG scores may assess different things. Do not add or compare them as though they used a common unit.
Do not turn progress into a universal promise
An improving indicator does not automatically prove the company has no impact, is sustainable in every activity or has lower financial risk. State the observed result and its limitations.
For investment decisions, ESG information complements the analysis. It guarantees neither returns nor protection from loss. Price, debt, profitability and other risks still require separate assessment.
Frequently asked questions about ESG criteria
What do the letters E, S and G stand for?
Environmental, social and governance. These dimensions organise topics for analysis, but do not by themselves define one methodology or a universal score.
Which indicators should an SME track?
Those relevant to its obligations, significant impacts and risks. Selection depends on the sector and purpose. A short, well-defined list may be more useful than a large unreliable dashboard.
Does lower emissions intensity mean lower total emissions?
No. If production increases, total emissions can rise despite improved intensity. Show both perspectives when relevant.
Are ESG criteria only relevant to investors?
No. They can support internal management, procurement, customer relationships, financing and reporting. Adapt the information to its recipient and the decision involved.
Can emissions be calculated from accounting expenditure?
Not directly in every case. Methods may use physical data or, for certain estimates, monetary data with suitable factors. Explain the method and limitations: an amount in Swiss francs is not itself an emissions measurement.
