There is ‘work to be done’ to put ‘S’ In ESG, says Helen Goulden OBE
The CEO of The Young Foundation discusses how the ‘social’ dimension of ESG is interpreted by businesses in the UK today
UK businesses have been seized by the material, moral and regulatory responsibility to take action on issues related to the climate crisis, but uncovers a lack of attention, measurement and commitment to social outcomes as part of ESG strategies, it has been claimed.
A new report, shared with Net Zero Investor by The Young Foundation this weekend, explores how the ‘social’ dimension of ESG is interpreted by businesses in the UK today.
It draws on analysis of FTSE100 companies and a large survey of SME and large UK businesses.
“There is no shortage of challenges besetting businesses right now, as a result of the compounded impacts of Brexit, the pandemic, political turbulence, rising costs and the war in Ukraine,” said Helen Goulden, OBE, CEO of The Young Foundation in London.
“Yet the motivation to create positive environmental and social change continues in the UK’s most progressive businesses,” she added.
The report sets out a framework to help businesses develop their social impact strategies to both support and extend current notions of how to drive societal change and impact.
Supporting businesses to plot their journey toward long-term meaningful collective social impact, the Framework has four scopes.
Firstly, measures to provide a safe, fair, secure, diverse and well workforce, followed by measures to enable a socially responsible and impactful supply chain.
Then there is communities: measures to meet the needs and priorities of local and stakeholder communities.
Finally, the report zooms in on collective impact: measures to help meet community needs and priorities in partnership with other sectors and industries, ensuring social and environmental outcomes are aligned and long-term social outcomes are measured.
Goulden added that: “This framework offers a route to driving social impact across the entire value chain, not just within the workforce or through charitable giving. It brings the ill-defined notion of ‘communities as stakeholders’ much more concretely into the realm of social responsibility for a business.”
She stressed that “it creates expectations of collaboration between businesses, public, academic, and civic actors to work on long-term, complex social and environmental challenges together.”
Beyond the workforce
Goulden's Framework takes ESG strategies beyond the workforce, where most social activities are currently focused, toward a sustained and generative relationship with communities, which are cited by 76% of FTSE 100 companies as ‘key stakeholders’. #
It also supports the concept that social and environmental action are fundamentally linked, helping businesses drive a fair and just transition to a sustainable economy and society.
Beyond Scope four, the report recommends companies assess vulnerabilities in their communities in relation to their plans to transition to net zero, targeting their social, community support towards these needs, households and groups.