{"id":380,"date":"2022-04-18T16:13:16","date_gmt":"2022-04-18T16:13:16","guid":{"rendered":"https:\/\/aplanet.org\/resources\/?p=380"},"modified":"2023-12-13T10:16:18","modified_gmt":"2023-12-13T10:16:18","slug":"the-s-in-esg","status":"publish","type":"post","link":"https:\/\/aplanet.org\/resources\/the-s-in-esg\/","title":{"rendered":"The \u201cS\u201d in ESG"},"content":{"rendered":"\n<p>Today more than ever, companies have to take the<strong> social aspect of ESG<\/strong> (environmental, social and governance) into account. This is a fundamental component that focuses mainly on working conditions and respect for human rights.<br>In recent years, investors have concentrated their efforts on the E or environmental dimension because it is easier to measure. As noted in the <a href=\"https:\/\/ssir.org\/articles\/entry\/fixing_the_s_in_esg\" target=\"_blank\" rel=\"noreferrer noopener\">Stanford Social Innovation Review<\/a>:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-default is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u00abPlanet isn\u2019t necessarily more important than people, it\u2019s just easier to measure. Investors like measuring things that they can put into their models, and carbon is easy to quantify.\u00bb<\/p>\n<\/blockquote>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Index<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Alternar tabla de contenidos\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/aplanet.org\/resources\/the-s-in-esg\/#Giving_the_social_aspect_of_ESG_the_attention_it_deserves\" >Giving the social aspect of ESG the attention it deserves<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/aplanet.org\/resources\/the-s-in-esg\/#1_The_importance_of_health\" >1. The importance of health<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/aplanet.org\/resources\/the-s-in-esg\/#2_Income_inequality\" >2. Income inequality<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/aplanet.org\/resources\/the-s-in-esg\/#3_Diversity_equity_and_inclusion\" >3. Diversity, equity and inclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/aplanet.org\/resources\/the-s-in-esg\/#4_Employee_skills\" >4. Employee skills<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/aplanet.org\/resources\/the-s-in-esg\/#5_Improving_communities\" >5. Improving communities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/aplanet.org\/resources\/the-s-in-esg\/#6_Social_innovation\" >6. Social innovation<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/aplanet.org\/resources\/the-s-in-esg\/#The_S_in_CSR\" >The S in CSR<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Giving_the_social_aspect_of_ESG_the_attention_it_deserves\"><\/span>Giving the social aspect of ESG the attention it deserves<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The <strong>social aspect of ESG i<\/strong>s manifested through six distinct variables. All of them emphasise the importance of treating workers well, as companies cannot progress if they do not take proper care of their workforces.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_The_importance_of_health\"><\/span><strong>1. The importance of health<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Health is the foundation on which society is built. Therefore, health loss<strong> &#8211; both physical and mental &#8211; has a <a href=\"https:\/\/www.maddyness.com\/uk\/2022\/03\/16\/join-the-dots-what-significance-does-health-have-in-responsible-investment\/\" target=\"_blank\" rel=\"noreferrer noopener\">systemic impact<\/a><\/strong>, as modern success is based on interdependence. As seen with the coronavirus pandemic, the health loss of individuals on a large scale affects the performance of businesses and the economy as a whole. Valuing health enables workers to perform at their best and live their lives to the fullest.<\/p>\n\n\n\n<p>This concern is also of great importance to investors. Too often, the \u00abhealth\u00bb factor is not mentioned when talking about investments, giving priority to other high-impact factors even though its impact is significant. This leads to <strong>financial risks<\/strong> by failing to create workplaces that enhance wellbeing. Initiatives such as the <a href=\"https:\/\/www.health.org.uk\/funding-and-partnerships\/programmes\/long-term-investors-for-people%E2%80%99s-health\" target=\"_blank\" rel=\"noreferrer noopener\">Long-term Investors in People&#8217;s Health<\/a> programme (LIPH) have been created to enable the transition to a prosperous society that prioritises wellbeing. This project classifies <strong>health as a systemic risk for investments<\/strong>. The main objective is to establish best practices and opportunities, with the help of experts who produce metrics and optimise data management by creating new KPIs.<\/p>\n\n\n\n<p>In this way, investments will be channelled to the companies that design the best working environments. This includes, amongst other examples, <strong>ergonomic spaces, flexible working hours and psychological support<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Income_inequality\"><\/span><strong>2. Income inequality<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The pandemic has hit the economy hard, but it is<strong> the most vulnerable groups who have been hit the hardest<\/strong>. To address this problem, it is essential that companies adjust their wages and make them fair.<\/p>\n\n\n\n<p>The aim has to be to eliminate in-work poverty. This can be achieved by <strong>establishing a minimum wage which does not vary according to the activities performed<\/strong> so that workers have a safety net that they can rely on. However, remuneration must also be fair and related to productivity.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Diversity_equity_and_inclusion\"><\/span><strong>3. Diversity, equity and inclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Diversity <\/strong>is another factor that should be paid attention. Major multinationals in the investment sector, such as <a href=\"https:\/\/www.forbes.com\/sites\/guidehouse\/2021\/04\/06\/the-s-in-esg\/?sh=177337803839\" target=\"_blank\" rel=\"noreferrer noopener\">BlackRock<\/a>, are clear about this. In fact, the US firm has stated that it will ask companies for certain information before investing in them. In particular, they will have to report on the racial, ethnic and gender composition of their workforce.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Employee_skills\"><\/span><strong>4. Employee skills<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A workforce with the right skills is crucial, as a company\u2019s survival depends on it. For this reason, they must strive to <strong>find the most talented profiles and to train them<\/strong>. To achieve this they must be inclusive: talent is not correlated to social background.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Improving_communities\"><\/span><strong>5. Improving communities<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The <strong>social part of ESG <\/strong>also includes communities. Companies are located in communities and hire people from them. It is therefore important that their actions contribute to <strong>improving their well-being<\/strong>. This allows them to give back the support shown by the population when purchasing their products and services.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_Social_innovation\"><\/span><strong>6. Social innovation<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>According to the <a href=\"https:\/\/www.oecd.org\/regional\/leed\/social-innovation.htm\" target=\"_blank\" rel=\"noreferrer noopener\">OECD <\/a>definition, social innovation is the design and implementation of new solutions that involve \u00ab<strong>conceptual, process, product, or organisational change, which ultimately aim to improve the welfare and wellbeing of individuals and communities<\/strong>\u201d. Through <a href=\"https:\/\/www.weforum.org\/agenda\/2022\/01\/how-15-leaders-are-changing-the-world-through-trust\/\" target=\"_blank\" rel=\"noreferrer noopener\">various entrepreneurship initiatives<\/a>, social innovators have<a href=\"https:\/\/www.weforum.org\/impact\/the-schwab-foundation-for-social-entrepreneurship-is-advancing-social-innovation-worldwide\/\" target=\"_blank\" rel=\"noreferrer noopener\"> improved the lives of 722 million people over the past 25 years<\/a>, according to the <a href=\"https:\/\/www.schwabfound.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">Schwab Foundation<\/a> for Social Entrepreneurship. Many initiatives undertaken by the social economy and civil society have proven to be innovative in addressing socio-economic and environmental problems while contributing to economic development. Obtaining the right conditions for this to occur depends on the policies in place:&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-default is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cTo fully tap the potential of social innovation, an enabling policy framework is needed to support public, non-profit and private actors to co-construct and implement socially innovative solutions and thereby contribute to address socio-economic issues, build stronger territorial resilience and better respond to future shocks.\u201d<\/p>\n<cite><a rel=\"noreferrer noopener\" href=\"https:\/\/www.oecd.org\/regional\/leed\/social-innovation.htm\" target=\"_blank\">OCDE<\/a>, Social Innovation<\/cite><\/blockquote>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_S_in_CSR\"><\/span>The S in CSR<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Along with <strong>workers&#8217; rights,<\/strong> companies also have to take care of their <strong>Corporate Social Responsibility <\/strong>actions. Initiatives with a real positive impact should avoid <strong>socialwashing <\/strong>at all costs. This term refers to \u00abaesthetic\u00bb and superficial social activities that lack real commitment.They tend to be used in marketing campaigns to enhance a brand\u2019s image.<\/p>\n\n\n\n<p>To prevent this, <strong>CSR actions must be relevant and honest with measurable results<\/strong>. A good example would be a donation to support sustainable causes within a community, which then empowers the community through a resilience-based project. In this way, the company provides real help and not just a facelift.<\/p>\n\n\n\n<p>In short, the S represents all things social and worker-related in both ESG and CSR. Undoubtedly, employees are a key part of any company, so they must be treated and valued accordingly. In addition, actions taken by companies need to have real impact in order to prevent socialwashing. To avoid falling into bad practices, <a rel=\"noreferrer noopener\" href=\"https:\/\/aplanet.org\/demo\/\" target=\"_blank\">digitalisation <\/a>is the solution to follow.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-css-opacity\"\/>\n\n\n\n<p><strong>Subscribe to our resource hub to keep up to date with the latest trends in the sector<\/strong><\/p>\n\n\n<p><!--[if lte IE 8]>\n<script charset=\"utf-8\" type=\"text\/javascript\" src=\"\/\/js.hsforms.net\/forms\/v2-legacy.js\"><\/script>\n<![endif]--><br \/>\n<script charset=\"utf-8\" type=\"text\/javascript\" src=\"\/\/js.hsforms.net\/forms\/v2.js\"><\/script><br \/>\n<script>\n  hbspt.forms.create({\n\tregion: \"na1\",\n\tportalId: \"5618409\",\n\tformId: \"c7796cce-5645-48c2-9c52-0cd692dd80d8\"\n});\n<\/script><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Today more than ever, companies have to take the social aspect of ESG (environmental, social and governance) into account. This is a fundamental component that focuses mainly on working conditions and respect for human rights.In recent years, investors have concentrated their efforts on the E or environmental dimension because it is easier to measure. As [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1676,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","cybocfi_hide_featured_image":"","twitterCardType":"","cardImageID":0,"cardImage":"","cardTitle":"","cardDesc":"","cardImageAlt":"","cardPlayer":"","cardPlayerWidth":0,"cardPlayerHeight":0,"cardPlayerStream":"","cardPlayerCodec":"","footnotes":""},"categories":[6],"tags":[24,12,38],"class_list":{"0":"post-380","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-blog","8":"tag-csr","9":"tag-esg","10":"tag-social-impact","11":"entry"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The \u201cS\u201d in ESG - APLANET<\/title>\n<meta name=\"description\" content=\"To be sustainable, companies must not lose sight of the social aspect. 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