Many see “environmental, social and governance,” or ESG, and tend to focus on the first letter – E for environmental. (This includes me.) Maybe this has to do with how all things related to climate are focal points in the news. Maybe it has to do with the fact that the Biden administration set goals of securing a 100% clean electrical grid by 2035 and reaching net-zero carbon emissions by 2050.
There isn’t a clear answer as to why the spotlight shines brighter on “E” when compared to the other two letters.
What is clear is that social sustainability-related issues have wide-reaching consequences, affecting businesses and the local economies in which they are embedded. The presence of limited opportunities and entrenched inequalities imposes societal and economic costs. The World Bank estimates that the economic loss due to gender inequality alone amounts to an astonishing $160.2 trillion.
Therefore, executives express the belief that their organizations must adopt a position on social sustainability and effectively convey it in a manner consistent with their brand identity.
And the results of adopting a position on social sustainability are significant.
According to a new study commissioned by NTT Corp., large enterprises investing in social sustainability see an average increase in revenue of $710 million. The study, conducted in collaboration with ThoughtLab, also revealed that leading firms in social sustainability see a 11.4% increase in employee productivity and unlock around $675 billion in GDP across eight countries and five industries. Executives also report an average 8% revenue increase.
The findings of the study underscore the compelling economic and societal benefits that large enterprises can reap from investing in social sustainability initiatives. They know this – 62% of companies plan to increase social sustainability spending by an average of 6%, according to the study.
- Comprehend and effectively convey the rationale behind embracing social sustainability in the business context. Social sustainability now stands as a strategic means to enhance a company's standing, expand its market presence, and concurrently bolster its financial performance, productivity and shareholder equity.
- Articulate a well-defined vision, strategy, and a comprehensive framework encompassing policies and procedures across all facets of social sustainability. Continuously evaluate performance based on sustainability metrics and integrate sustainability principles and practices thoroughly within the core operations of the business.
- Expand the reach of social sustainability throughout the supply chain. Prominent figures in the industry take proactive steps to oversee supplier adherence to human rights and business conduct standards, proactively assess sustainability risks originating from tier-two and tier-three suppliers and conduct supplier screening procedures to guarantee their commitment to ethical and sustainable practices.
- Forge collaborative alliances to achieve shared objectives and amplify the impact.
- Leverage digital technologies to propel sustainability outcomes forward. Visionaries excel in harnessing digital technologies, especially specialized ones, to attain their social sustainability objectives. The most significant achievements arise from synergistically deploying these technologies in concert.
“Now more than ever, businesses are hearing demands from across the value chain for forward-thinking, inclusive and socially impactful operations,” said NTT’s Kaoru Asakura, Vice President, Head of Sustainability Office, Corporate Strategy Planning Department. “This study proves that investment in social sustainability is in the interest of both businesses and the broader society.”
The long story short of this study? Social sustainability has the potential to unlock fresh markets, enhance business attraction and retention and serve as a wellspring of innovation. It also fosters trust in the company's brand and bolsters its overall credibility.
Edited by Alex Passett