The ‘S’ in ESG – Thinking ‘social’ and engaging your people this Earth Day

Today marks Earth Day which, as a reminder, is an international day devoted to the environmental cause of conservation and sustainability. It began in the US on April 22nd 1970, after millions took to the streets to protest the mass destruction being done to the planet and its resources.¹

Earth Day has since been designed to raise awareness of the climate crisis and bring about change to protect our environment. Participation in Earth Day can take many forms, from switching to sustainable investments by choosing the ESG option in your savings, to everyday changes like selecting an energy tariff which actively contributes to renewable generation.

In the lead up to Earth Day this year, we recently worked with a sustainability charity on a strategic business case to understand whether to invest time, resource and funding to commercialise and scale one of their environmental initiatives. Having these opportunities available for our people contributes to protecting our planet, while simultaneously allowing us to deliver truly purposeful work.

Companies commonly refer to their ESG strategy or framework, but this is typically focussed on environmental and governance issues (due to regulatory pressures), with the social element often overlooked. Regulations in social issues are less developed, with the data harder to measure and quantify. The good news? As documented by Havas in our annual Meaningful Brands survey, 59% of people would stop buying from companies that don’t respect the planet or society.² A combination of this changing consumer sentiment plus increasing regulatory requirements mean more businesses are starting to realise that social issues are also an important part of their sustainability strategy.

54 years ago, there was a demand for change. This Earth Day, let’s honour those at the heart of the environmental movement – the people.

What does the ‘social’ in ESG really mean?

The wave of new regulations has accelerated the narrative around people. More specifically, the social standards for the Corporate Sustainability Reporting Directive (CSRD) covers key considerations for your own workforce and the workers in the value chain, such as decent working conditions, equal opportunities and upheld work-related rights. For affected communities, are local and indigenous communities protected? And for consumers and end-users, is their personal safety and social inclusion being supported?

At its core, social is about an organisation’s relationship with people, and its policies that impact individuals, groups and society. First, let’s break down what the ‘S’ could specifically mean for an organisation’s employees. A few examples of social considerations include:

• the health, safety and wellbeing of your people;
• your company culture;
• human rights and modern slavery due diligence; and
• the diversity, equity, inclusion and sense of belonging for your teams.

In recent years, we’re seeing an increasing intersection between culture change and sustainability agendas. When it comes to attracting and retaining your talent, there has been a lot more discourse on a company’s values, purpose and how they align with an individual’s. According to research, purpose-driven companies report 40% higher employee retention than their competitors.³ People want to work for companies that stand for something authentic and meaningful.

Embedding social within your strategy: bringing your values to life

Truly embedding your social ambitions will impact your attraction and retention of all talent, but most specifically Gen Z. Born between 1997 and 2012, the eldest of this generation has already begun their careers and makes up a large part of your workforce today. A survey in 2021 by EY suggests that 63% of Gen-Z feel it’s “very or extremely important” to work for employers that share their values, as their work life is fuelled by purpose and meaning, rather than traditional attributes like money and status.⁴ Our research also asserts that transparency is particularly important to Gen Z and they expect no misinformation nor gap between pledges and reality.⁵

Thinking about your employee value proposition, is your business supporting a mission or cause? A cause is believed in and can be supported through volunteering days and fundraising, while a mission is what drives you towards accomplishing your purpose. A mission is more powerful, but both are just as important. The mistake to avoid is when you talk about your mission as a business but act on the cause.

How do you engage and support your people this Earth Day?

Using Earth Day as the trigger, there are three key considerations to start thinking about to engage your people on social action:

1. Understand to what extent sustainability (and specifically social) themes are a key motivator for your people.
2. Co-design initiatives that are win-wins – these develop and engage people, but also contribute to your organisation and the wider society.
3. Ask yourself as a business – do we want to tackle social as a mission or a cause? How does it relate to your company culture?

By developing a social agenda now and embedding them in your organisation’s strategy, you’ll be well placed to meet the challenges of new regulations while also being able to make use of the opportunities that come with setting social priorities. These include increased trust and reputation, higher employee attraction and retention through a stronger employee value proposition, and a more purposeful direction. We’re collecting great ideas of how businesses are doing this. If you have any ideas or thoughts, we’d love to hear from you!