A recent Corporate Secretary article reported that nearly 75% of respondents to an impromptu survey at a recent ESG investment conference said that the “social” component of the ESG equation was the most difficult for companies to analyze and integrate. A Dix & Eaton blog has some ideas for how companies can start the process of thinking about what to say — in upcoming ESG reports and elsewhere — about that aspect of their ESG efforts. Here’s an excerpt:
– Employee safety and health, training, protective equipment – what programs did you put in place in response to the pandemic, what does your 2020 data say about the effectiveness of those efforts, what did you learn, and what might you commit to for the longer term?
– Human capital management – what have you done to retain key people during the pandemic, handle unavoidable pay cuts, furloughs and layoffs in a thoughtful way, position the company and its people to recover from the upheaval, facilitate remote working arrangements and effectively manage and engage a remote workforce?
– Human rights – do you have a published human rights policy, is it relevant and applied across all regions in which you operate, how do you evaluate its effectiveness, how do you deal with non-compliance, and how well are you monitoring your supply chain?
– UN SDGs – if the UN Sustainable Development Goals have not been part of your reporting to date, might now be the time to lend your support to UN goals such as No Poverty, Zero Hunger, Good Health and Well-Being, Quality Education, Gender Equality, Reduced Inequalities, Peace, Justice and Strong Institutions?
– Diversity, equity and inclusion – do you have a policy, what are your goals and metrics, what are you going to do differently, how much change is needed, and how fast will you move?
– Board diversity – many companies have made progress on gender diversity on the Board (with at least two female Directors, for example), but how are you going to address racial and ethnic diversity (which is not nearly as well developed)?
– Environmental justice – with both environmental and social angles, are you ready for this to become a prominent ESG topic? (We rarely see it addressed in current reports, but we think it will receive more attention going forward.)
The social component may be the most difficult part of ESG for companies to address, but the blog says that it will feature prominently in 2020 ESG reports — which Dix & Eaton expects will look much different than in prior years. In any event, with the emergence of a new “human capital” disclosure requirement and growing investor interest in the “S” in ESG, the corporate response to social concerns is a topic that’s likely to grow in importance over the next several years.
-John Jenkins, TheCorporateCounsel.net December 1, 2020
