> For the complete documentation index, see [llms.txt](https://bmv.gitbook.io/mundi-token-whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://bmv.gitbook.io/mundi-token-whitepaper/business-context/an-economic-look-towards-the-environment.md).
# An economic look towards the Environment
### What is ESG
Environmental, social and governance, or its acronym ESG is the term used to identify matters that may traditionally be associated with sustainability or corporate responsibility, but are deemed to have a material financial impact on an organization’s short and long term value. Although the discussion of how businesses can implement a social and environmental agenda into their processes is not new, it gained substantial momentum in the last year in face of new developments in the climate change and inequality crisis. Not only governments, but the financial markets and companies are supposed to be active participants in attaining the milestones set globally, much because of the public perception that the whole economy is both responsible and affected for the sustainability and survival of our society.
This is led by a change of companies’ dialogue from “how do we impact the climate” to “how does the climate impact us”. The FMI already recognizes the importance of the consideration of physical and transition risks related to climate change in financial analysis and both the OECD and the EU are progressing with theme-specific taxonomies for new investments. The message is clear, the current social and environmental issues will impact the economy in large scale and policy makers as well as companies, financial institutions and investors must act accordingly.