The 'S' of ESG and wellbeing: An integrated approach to sustainability.
Today, the emphasis is primarily on the ‘E’ of ESG – Environmental, Social, and Governance criteria. However, it is clear that in the foreseeable future, social responsibility (‘S’) and good governance (‘G’) will gain equal importance in a company’s sustainability or ESG performance. Indeed, according to Siviglia Berto, Managing Director of B-Tonic, “social is the new green.”
The social pillar of ESG has evolved into an undeniable foundation of sustainable business alongside environmental considerations and good governance. Companies must integrate the ‘S’ of ESG into their strategies and operations, aiming for a sustainable and successful future. Moreover, the European Union increasingly requires companies to report on their non-financial or sustainable performance. The question is how a company best integrates the ‘S’ into its strategy and what the benefits are? This answer can be found in our trend report.
Measurement as a lever for wellbeing
How do you know whether your company culture actually supports well-being? Often, what is whispered in the corridors or posted on HR sites like Glassdoor and Vault Platform is subjective information, colored by recent events in the workplace or the mood of the day. Wouldn’t it be a strong idea then to objectively measure wellbeing and transparently communicate the results? This might seem radical, but it aligns seamlessly with ESG reporting, where companies publicly report on their performance in terms of environmental, social policies, and good governance. The European CSRD directive even obliges companies to submit reports on non-financial performance.
This provides a solid rationale to better understand employee wellbeing and communicate about it with stakeholders.
Why focus on the ‘S’ of ESG?
Literature research has shown that focusing on the social aspect is important for several reasons. Firstly, talent and retention play a crucial role; employees who feel that an organization is committed to social and ethical issues are often more loyal and tend to stay longer with this organization. This is directly connected to the brand, reputation, and public image of a company. Leaders recognize that a significant portion of their organization’s market value is attributable to its overall reputation. Moreover, focusing on an inclusive human experience leads to organizations that portray themselves as diverse and inclusive, often outperforming their competition.
Social influence on productivity and workplace wellbeing
Productivity and output are also significantly influenced by the social aspect. Employees who are part of organizations with a strong social impact feel more inspired, motivated, and engaged in their work. This contributes to a happy and healthy workplace, where social responsibility has a positive impact on employee wellbeing as a result of responsible and ethical behavior. Additionally, human rights and labor standards play an important role. Organizations that prioritize human rights as a core principle can manage resilience more effectively.
Innovation through inclusivity: The importance of social factors
The ‘S’ of ESG (Environmental, Social, and Governance) is not only ethically responsible but also of great importance from a business perspective for creating a sustainable future for both companies and their employees. It is time for this social dimension to be taken seriously and integrated into the core of business strategies and policies, highlighting how crucial it is to cultivate an environment that supports both social values and business success.
