New Research: The state of “S” in ESG reveals new norms, unseized opportunities
Inaugural “Social” benchmarking study finds organizations are acting, and employees are noticing – but real-world impact is lagging
Toronto, ON – November 17, 2022 – The rise of the “S” in ESG – the social dimension – is shifting organizational behaviour. And while employees are noticing, the impact is lagging, according to The State of Social in ESG, a new survey of North American companies and employees.
The study, led by ESG Global Advisors and Argyle, finds that the momentum for the “S” in ESG has accelerated in the wake of rapidly evolving social expectations, and amidst an unprecedented battle for talent.
“What we’re seeing is that organizations are normalizing foundational efforts around social issues—from social risk integration to human capital management to DEI,” says Dustyn Lanz, Senior Advisor at ESG Global Advisors. “However, we’re seeing gaps in actions that generate tangible outcomes, such as those related to hiring, procurement, and supply chain. This highlights an opportunity for leaders to be courageous and take action now, rather than waiting for best practices to be defined by others.”
As management teams strive to build more inclusive and human-centric work environments, employees, who are the among the most important stakeholders for S-related strategies, place great value on corporate social performance. However, both organizations and employees lack benchmarks and best practices to assess progress—a challenge this study seeks to address.
“When it comes to attracting and retaining talent, there is a big message in this study for employers,” says Jessie Sitnick, Senior Vice President of Sustainable Value at Argyle. “Social performance is tremendously important, and while the bar is high, employees are receptive and responsive to progress. For those aiming to build a truly diverse and inclusive workforce, being open about your journey—where you are, and where you aim to go—matters.”
The State of Social in ESG top findings include:
- Close to half of the organizations surveyed are integrating social risk into their enterprise risk management systems and board governance. The majority of others are either working on or considering it.
- 94% of organizations are embracing flexible work models and 79% are increasing investments in employee physical and mental health.
- While the vast majority of organizations have developed or are developing diversity, equity and inclusion (DEI) policies and training programs, very few are setting established targets or undertaking third-party assessments such as racial or pay-equity audits.
- Close to half of participating organizations have a human rights policy, but only half of that group extend that policy to their supply chain.
- While most employees give their organizations positive marks on social issues, there is a persistent gap between how highly they value social performance and how well they think organizations are actually doing.
- BIPOC employees place a higher value on Indigenous issues and reconciliation. Interestingly, they also rate their organization’s performance higher in this area.
About the Report
The organizational data in the report was collected via survey in July 2022 from 73 organizations across North America. The public companies that participated in the research represent a combined market capitalization of $3.34 trillion, while the institutional investor and financial institutions represent $2.04 trillion in assets under management and administration. The employee data were compiled through a survey of 1,000 Canadian and 1,000 US employees by Leger is August 2022.
“Given the backdrop of the world we live in with the intricacies of several social reckonings and injustices highlighted throughout the world and in this report, this research is timely and highly relevant.” – Julie Park, Head of Corporate Sustainability and ESG Investor Relations, TMX Group.
“The research in this report represents an important step forward in understanding and benchmarking social practices. It provides foundational information businesses need in order to build strategies that lead to tangible results. It is this kind of work, combined with collaboration across all sectors and stakeholders, that is needed to achieve a more sustainable and equitable world.” – Justine Hendricks, Chief Corporate Sustainability Officer, Export Development Canada.
TMX Group, a global market operator, and Export Development Canada contributed forewords to the report and participated in the study.
On November 29th, ESG Global Advisors and Argyle will host an interactive webinar to explore the study’s findings with a panel of leading “Social” experts. To learn more and register visit: https://www.eventbrite.ca/e/the-state-of-the-social-in-esg-tickets-459111754617
About ESG Global Advisors
ESG Global Advisors bridges the gap between companies and investors on environmental, social and governance (ESG) factors. A multi-disciplinary team with significant capital markets experience, they are uniquely positioned to offer expert advice to companies and investors on material ESG factors that drive long-term value.
As a leading North American boutique ESG advisory firm, ESG Global’s clients include public and private companies, institutional investors, and professional associations. ESG Global offers customized ESG education sessions, conducts ESG materiality assessments, develops ESG strategies and supports ESG reporting for its corporate clients. The firm develops ESG policies, due diligence frameworks, portfolio monitoring and provides reporting support for its investor clients. Find out more >
For more than 40 years, Argyle has been chosen by the world’s biggest brands, put big ideas onto the public agenda, and grown to become one of North America’s largest and most acclaimed engagement, communication and reputation advisory firms.
Argyle’s clients span many sectors, including finance, technology, health care, agri-food, travel, professional services, infrastructure, government, non-profits and many more. Argyle has more than 140 full-time employees in Toronto, Vancouver, Victoria, Edmonton, Calgary, Winnipeg, Ottawa, Halifax and Washington, D.C., with affiliates in Montreal and Quebec City, and in more than 40 countries around the world. Argyle is a proud to be a founding agency of Believeco Partners, a leading North American owner and operator of independent communications and marketing agencies. Find out more >