This is a question that often creates confusion in the industry, and it is important that we make the distinction between the two terms. Here is our take on this - described as simply as we can.

<aside> 🎯 When we talk about ESG, we see it as both the risk and opportunity connected to the company’s operational practices that relate to environmental, social, and governance factors. In simple terms, these are all non-financial aspects that could influence a company’s performance. Awareness and improvements across these dimensions have proven to lead to more robust and more resilient businesses over the long term.

</aside>

• A company that chooses to incorporate ESG into its business model, processes, and policies will be preventing or reducing significant effects on important negative outcomes for people and the planet. This can be impactful in itself. These days, incorporating ESG into companies has become a must and is one of the parameters to closing deals.
• ESG and impact are not mutually exclusive. For a company to have an impact, strong ESG practices also need to be in place.

<aside> 🎯 Impact is when the outcomes of the business objective, products/services lead to a positive environmental or social benefit that is intentional, demonstrable, quantifiable, and verifiable. This impact is often linked to the UN Sustainable Development Goals (SDGs). The SDGs or Global Goals are 17 interlinked global goals designed to be a "blueprint to achieve a better and more sustainable future for all." These were set up in 2015 by the United Nations General Assembly (UN-GA) and are intended to be achieved by 2030.

</aside>