19th Mar 2023
3 Min Read

What does the 'S' in ESG stand for?

Russell Norton
Russell Norton
People & Change

Your people have spoken. They have values, they have purpose … and they want you to, too. Director of client experience and our resident diversity and inclusion expert Russ Norton shares how you can supercharge your social impact efforts to make change happen.

Inaction is not an option: 82 per cent of employees want to be able to link their own personal values and purpose with the organisation they work for. That means your people care about your approach to the hottest issues of the day.

Environmental, social and governance (ESG) policies matter, to your customers, to your investors and to your people. When done right, your efforts can help your company grow and have a positive impact on the world around you,” explains Russ.

Get ESG right – and it can bring about real change and action on the things that matter. But what is ESG? What does the S stand for? And what does it all mean for you?

What is ESG?

Environment, social and governance refers to a set of frameworks and policies that lay out how your business acts on certain issues. From your net zero policy to your diversity and inclusion initiatives, your ESG efforts cover some of the most contentious topics in the workplace.

Around 20 per cent of people have turned down a job because the company’s ESG commitments were not in line with their values. So if you want to find and hold onto the best talent and help them do the best work of their lives, then ESG is a key piece of the puzzle.

S is for social

Social is the S in ESG, and it refers to how you impact society, communities and the people around you. It’s your relationships with your employees, the businesses you work with and communities you operate in.

Your social efforts can make or break your reputation, but also indicate the health of your business. They include:

  • Purpose (and social purpose)
  • Values
  • Employee value proposition
  • Diversity and inclusion
  • Operating ethically
  • Protecting human rights
  • Health and wellbeing.

For investors, progress in these areas shows that your organisation is a lower-risk growth opportunity for them. But for your people, they can mean something completely so much more.

A win-win

Your employees don’t just want to see you drive your social efforts; they want to see action and lasting change; your efforts to include them and align with their values can impact their performance. Those employees who feel like a valued member of their team are 57 per cent less likely to experience burnout.

But for businesses, social efforts are a win-win. “Take D&I initiatives for example,” says Russ. “There’s a moral reason – it’s the right thing to do – but it also drives psychological safety which makes for a more productive workplace. When people feel safe enough to speak up, it can have fantastic business benefits.

“Or take investments in education. Organisations are investing in education in underprivileged communities. This helps those children aspire to a career, but it also creates a better talent pool in coming years and decades. It’s not a choice between a happy workplace or a productive one; your social efforts must align with business efforts.”

Let’s get social

So while shareholders, investors and colleagues want to see action and progress on ESG, they may not always want to see the same things. But remember that while your social efforts benefit everyone, pleasing all parties isn’t easy.

Drive your own ESG efforts forward and create lasting change by remembering to:

  • Find your balance: Shareholders and investors want to see you commit to one thing; your people another. Find a balance between the two. But remember that what’s good for one is usually good for the other.
  • Know your audience: When you’re communicating your efforts, remember who you’re talking to. Everyone wants to hear what you’re up to, but the story you tell one audience isn’t necessarily what the other wants to hear. Report to your investors, enthral your people.
  • Take local action: If your organisation is spread over multiple sites or locations, understand that those employees may not respond to your efforts in the same ways. Know your people, know what makes them tick, know what they want – and deliver.
  • It’s a long-term investment: Change doesn’t happen overnight. Your efforts in the social space are planting the seeds for a better workplace, for better communities and a better society.
  • Celebrate your progress: Don’t keep your efforts to yourself. Your people want to hear just how far they’ve come and the positive impact they’re having on each other and the communities they live in.

Russ adds: “The circle of benefits from your social and wider ESG efforts are undeniable and the most successful strategies are those where that investment in people and communities can be clearly seen. But remember, there is always moral case for building a better future and a better workplace.”

Get the guide

Want to learn more on how you can communicate your ESG initiatives? Download our free guide.

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