A company’s ability and commitment to include environmental, social, and governance (ESG) factors in its strategy becomes more and more important to investors, consumers, policy makers, civil society organizations and other stakeholders. There is a fundamental societal shift towards sustainability and responsibility. Managers are held accountable for ESG compliance. While environmental and governance aspects have always been key criteria, social sustainability criteria such as diversity and inclusion, human rights, health and safety at work and equal employment opportunities for minorities have become a focal point only more recently. Many companies still have a rather vague understanding of what ESG actually means and how ESG criteria can be addressed by a company’s compliance organization. At the same time, disclosure and reporting obligations make a company’s approach to ESG very transparent for both internal and external stakeholders, so looking into this topic behind closed doors is no longer an option.
Social factors – Time to focus on the “S” of the ESG
