ESG, which stands for Environmental, Social, and Governance, was coined in 2005. Since then, times have changed, but the significance of sustainability has only continued to grow. ESG reporting is already mandatory or being actively considered in many cases, with the majority of S&P 500 companies already publishing ESG reports. Inflows into sustainable funds have risen from $5 billion in 2018 to $2.5 trillion in 2022. Across industries, geographies, and company sizes, more resources are being allocated towards improving ESG [1].
As consumers become more aware of different options and services, and employees do more research when applying for jobs, focusing on ESG metrics becomes a must for companies.
What Is Social Sustainability?
Broadly speaking, social sustainability refers to conducting business in ways that benefit society and protect people. This involves identifying and understanding how business practices impact people, both positively and negatively. In this context, “people” refers to everyone involved, including employees, other workers in the value chain, customers, and local communities [2]. It is not just governments and societies that should protect and cover the human rights, but businesses have a significant effect and impact, too.
Social sustainability has the potential to unlock new markets, help retain and attract business partners, support innovation, boost morale and employee engagement, and promote high levels of productivity, risk management, and conflict resolution [2].
Social Sustainability & Culture
A socially sustainable culture prioritizes the wellbeing, inclusivity, and equity of employees and the broader community. It should include collective, intentional values, practices, and decision-making processes that promote social responsibility, respect, and fairness.
It is important to note that ESG measures do not necessarily reflect how positive or agreeable a company’s culture is. A socially sustainable culture is not about being overly polite and conflict-free, but rather about approaching conflicts constructively and maintaining open and transparent communication. Especially when it comes to diversity and inclusion, there should always be room for ongoing education and increasing awareness on various topics.
Organizations should pay attention to build sustainable culture to support the employees health, safety, diversity, human rights, equitable labor practices, empowerment, and wellbeing. Needless to say, benefits or small perks do not achieve desired results if there are large issues for example with employee safety or lack of diversity.
Social Equity
- Ensuring equal opportunities for everyone to thrive and express themselves, such as ensuring pay equity, pay transparency, and accessibility.
- Respecting individuals, giving them the opportunity to make an impact, and treating everyone fairly despite any differences in individuals or their backgrounds.
- Ensuring that employees feel valued, seen, and heard as themselves.
Diversity & Inclusion
- Fostering diversity and inclusion by hiring individuals from diverse backgrounds, ensuring a wide range of perspectives and experiences within the organization.
- Providing inclusive leadership training and making inclusivity a collective mission and value.
- Providing support and training on recognizing and addressing unconscious biases.
Wellbeing & Safety
- Supporting professional growth by providing enough resources, guidance, education, and support for employees to learn and explore their professional interests.
- Prioritizing the health, physical, and psychological safety and wellbeing of employees. For example providing ergonomic workstations, ensuring enough breaks, mental health support, healthy snack options, wellness challenges, events or education etc.
Where to start?
According to research, many companies make the mistake of having a poor definition of social sustainability, leading to a focus on the wrong goals and a lack of true integration of the theme [3]. To create lasting change in your organization’s social sustainability, it’s important to clarify the definition together. Consider what your organization would look like if it were truly socially sustainable. How would it impact your daily practices? What is the most urgent area that needs to be addressed?
Remember, social sustainability should not be a scary or overwhelming term. It should be a discourse that every employee and team member is invited to participate in. In case you’d like to read about how data can be used to support social sustainability, our founder Katarina Cantell has written a blogpost about it over here.
Social sustainability is not just a “nice-to-have” but a non-negotiable for companies that want to create a better future for people and the planet. By prioritizing the needs of individuals and communities, businesses can build a strong foundation for long-term success and contribute to a more sustainable world for all.
[1] McKinsey & Company. (August, 2022). Does ESG really matter, and why? Retrieved from https://www.mckinsey.com/capabilities/sustainability/our-insights/does-esg-really-matter-and-why
[2] United Nations Global Compact. (n.d.). What is social sustainability? Our work. Retrieved from https://unglobalcompact.org/what-is-gc/our-work/social
[3] Missimer, M. & Mesquita, P. (2021). Social Sustainability in Business Organizations: A Research Agenda, MDPI 14(5), 2608. Retreived from https://doi.org/10.3390/su14052608
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