Take a proactive approach to the S in ESG.
When asked about ESG, many organizational leaders will think about their company’s environmental impact and the demands of the investor. However, the scope of a business’s impact is more than measuring its effect on the environment. To meet the ESG expectations of a widening audience of stakeholders beyond activist investors, today’s companies must think and act more holistically to include their impact on society.
The Great Resignation has shown that current and prospective employees are aware of their options and will move on in their careers if they do not believe their employer’s position aligns with their values. Customers have a big voice too. In a recent survey, a staggering 73 percent of consumers reported brands must act now for the good of society and the planet, though 71 percent were also skeptical that brands will actually deliver.
Social responsibility has grown from vague and lofty statements in annual reports to a data-driven differentiator between organizations that struggle and those that thrive.
In measuring their company’s impact on society, organizational leaders may consider a wide range of initiatives. Community investment and equity in access to services, governance guardrails that ensure ethical supply chains, internal controls to ensure that the company’s policies are followed, training and recordkeeping on code of conduct training, a culture where employees are empowered speak up, and solid IT Risk programs to protect the data privacy of employees and customers are all imperatives.
Among the most visible elements of the S in ESG is how companies implement and track the progress of Diversity, Equity and Inclusion (DEI) programs and how they manage the changing needs of a hybrid workforce.
There is no question that DEI is a central and highly actionable pillar of any ESG program. Several years of rapid transformation in the corporate space have resulted in a definitive shift from DEI as a luxury program handled by HR to a core requirement in creating the type of respectful, inclusive and equitable culture demanded by today’s customers, partners, employees and prospective employees. Organizations have had time to develop DEI programs, yet many are still lagging when it comes to adopting proven solutions.
Organizations must be able to capture employee demographics, rates of training completion, levels of employee satisfaction, and rates of hiring, promotion and attrition when it comes to marginalized groups. This data must then be leveraged to drive tangible actions through programs designed to close the gaps.
The capacity to capture DEI data is a must but providing effective learning on the topic to change behavior and advance company culture is the way to demonstrate measurable organizational progress in ESG reporting.
Without a company culture that supports DEI and belonging, the needle won’t move—so integrating training that helps uncover unconscious biases that maintain the status quo is central to connected DEI intelligence.
Navigating the hybrid workplace
As the corporate workplace has transformed from a structure based on daily in-person interaction to a framework favoring remote-first collaboration, several new risk factors have taken employers by surprise. Whether adapting fully or partially to a remote workforce, organizations must defend against an accelerating incidence of data breaches, the challenges of keeping a remote workforce connected and engaged and the conduct and HR violations that can increase with remote employment.
Automated information collection can aid leaders in assessing risk across all the facets of their organization. Centralized policy portals that capture Code of Conduct training participation, effective cybersecurity training for a distributed workforce, and streamlined procedures for harassment reporting and other HR violations are examples of the Social risk management tools that are becoming more essential by the minute.
Balancing these critical needs is the key to preserving the organizational reputation and retaining the best talent through the Great Resignation and its associated shift to alternative corporate environments.
Organizational risk management will continue to occupy a critical position, but will also continue to evolve as the needs of the modern workplace adapts rapidly to our changing safety, social and environmental expectations. Ensure that ESG is a part of your overall strategic plan in risk assessment and management with the right tools from SAI360.
Read more about the fundamentals of ESG:
- E – Enhancing Environmental Reporting to Create Business Value and Thrive
- S – Social Considerations in ESG Programs
- G – Governance: The Foundation of the Ethical Enterprise