The CHIPS and Science Act, also known simply as the CHIPS Act, is a U.S. federal law signed by President Joe Biden on August 9, 2022. The primary goal of the CHIPS Act is to bolster domestic semiconductor manufacturing, enhance supply chain resilience, and promote technological research and innovation in the United States.

Many companies no longer utter these three letters: E-S-G. Following years of simmering investor backlash, political pressure and legal threats over environmental, social and governance efforts, a number of business leaders are now making a conscious effort to avoid the once widely used acronym for such initiatives.

Greenwashing is the practice of making false or misleading claims about the environmental benefits or sustainability of a product, service, or company. This can include exaggerating or fabricating a product's eco-friendliness, hiding its negative environmental impacts, or making unsubstantiated claims about its sustainability.

Diversity washing, similar to greenwashing, refers to the practice of companies or organizations making superficial or deceptive claims about their commitment to diversity and inclusion without taking meaningful action. It involves projecting an image of supporting diversity, equity, and inclusion (DEI) while not implementing substantive changes to foster an inclusive workplace or culture. This practice can mislead stakeholders—employees, customers, and investors—about the organization's true efforts regarding diversity.

Hypothetical beverage company called "FreshDrink Co." Financial materiality (impact on the company): Climate change is causing water scarcity in regions where FreshDrink Co. sources its water. This scarcity could lead to increased water costs and potential supply disruptions, directly affecting the company's financial performance and long-term viability. Environmental and social materiality (impact of the company): FreshDrink Co.'s water usage in water-stressed areas may deplete local water resources, affecting the surrounding ecosystems and communities' access to clean water.

Social impact in the context of double materiality refers to how a company’s operations affect people and communities. This includes direct and indirect consequences of business activities on employees, consumers, local communities, and society at large.

Governance impact in the context of double materiality focuses on how a company’s governance structures influence both its financial performance and its broader societal impact. This approach requires organizations to evaluate both how governance practices affect their bottom line and how they impact stakeholders such as employees, shareholders, and the community.

ISO 37000:2021 Governance of organizations — Guidance provides organizations and their governing bodies the tools they need to govern well, enabling them to perform effectively while behaving ethically and responsibly.