That is the earth ground connection for the generator. You should provide a ground.
One might use a ground rod if the soil is amenable to that. You could also use a nearby building ground rod. In dry climates one might consider wetting the ground, even down the ground rod hole if possible. It is a safety issue as much as anything else.
Information should be in the user manual. They colors of the wires mean nothing except that they probably had some house wire handy and may have used all three to have a higher current handling capability.
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