The rise of 'S' in ESG

The rise of S in ESG

9th April 2023

For too long, the "S" in ESG - environmental, social, and governance - has been overshadowed by its better-defined counterparts. However, it is now receiving the attention it deserves. The importance of a company's relationships with its workforce, communities, and political environment is becoming increasingly evident, and for good reason.

The "S" in ESG is a flexible term that encompasses a wide range of factors that influence a company's overall social impact. This includes labour relations, product safety, and consumer preferences. These factors can have both short- and long-term effects on a company's financial performance. Companies that prioritise these social issues not only reflect their values but also achieve higher and more reliable returns over the long term.

ESG investing recognises the role that the business community has in creating value for the common good and enhancing public trust. However, many companies struggle with the social aspect of ESG. Measuring and reporting on areas such as executive pay, industrial relations, organisational culture, and supply chain issues can be a significant challenge. It is important to understand the impact a company has on society and take steps to improve that impact.

The "S" in ESG is ultimately about creating a better future for all stakeholders by prioritising social factors alongside environmental and governance concerns. While social issues may be harder to define, they are no less important. A company's reputation, employee morale, and consumer loyalty all depend on how well it manages its social impact.

For employees, the "S" means standing up for social issues, such as diversity, equity, and inclusion. For consumers, it's about progress on data security and privacy. Companies that understand the impact of their actions and prioritise social factors will thrive in the long term.

At Regtick, we understand the importance of ESG and can support your program. By prioritising social issues, companies can make a positive impact on society and create a better future for all stakeholders. Don't let the "S" in ESG take a back seat. Embrace it and unlock the potential for sustainable, responsible, and profitable growth.

As we work towards a more sustainable future, it is imperative that businesses take a holistic approach to ESG, considering not only their impact on the environment and governance but also their social impact.