Azure, argent and vert refer to ice, snow, and grass, respectively. The lion is for Britain and the torch for exploration. The estoiles are from the arms of James Cook, who named South Georgia in honour of King George III and the South Sandwich Islands in reference to his sponsor, John Fourth Earl of Sandwich, who was First Lord of the Admiralty in 1775 when the islands were discovered. There are two reindeer herds in South Georgia. Mountain peaks are red because they are volcanic.
Supporters come from the local fauna.
There is no Blue Ensign for South Georgia, but there is a commissioner's flag - if I remember correctly, the governor of the Falkland Islands holds this office. The coat of arms which was granted on 14 February 1992 is used by the commissioner as a defacement for the Union Flag. It is not used as a defacement for a Blue Ensign.