From a recent ESG Investor’s weekly email news summary:
Guidance and metrics for measuring social risks are nowhere near as advanced as for climate risks, but that will not stop their continued rise up the investors’ agenda. Recent years have seen mounting evidence both of the critical need for businesses to nurture their human capital and of the willingness of firms to cut corners on pay, conditions, and wellbeing. Investor efforts to reduce use of arbitration mechanisms is just one example of employee-related issues being brought to the attention of Tesla’s management. The combination of below-inflation pay offers, mounting food and energy bills and regulatory pressure on pension trustees to manage social risks will keep the heat on HR departments and boardrooms.
I have noticed recent waning prioritization of social issues because of attention climate risks, DEI and water availability/use have received from investors and the media. There is a tendency to lose focus on ESG issues that aren’t the “squeaky wheel” of the moment. Social risks can be difficult to get a handle on as they are sometimes considered “soft” and the focus is many times on suppliers rather than the company itself. However, as ESG Investor points out, matters like pay, working conditions and employee wellbeing apply to the company’s direct operations and should be easier to establish metrics, find/gather relevant data and track progress.
Our checklists Assessing Your ESG Approach, Identifying Stakeholders and Assessing Their Interests, Promoting Equity Through Health Benefits and even Fighting ESG Fatigue are but a few resources available to PracticalESG.com members that can be helpful in reviewing and updating your ESG indicators.
