Performance:
Zones
The Three Zones of Social Performance
We wanted to understand and articulate the specific actions that constitute standard practice in the social sphere. So, we analyzed the aggregated survey data to identify which social practices are most widely adopted and which are least adopted. We propose that there are three “zones” of social performance, as follows:
Zone 1: Table Stakes
Practices adopted by a strong majority (≥60%) of survey participants and represent business imperatives for organizations aiming to position themselves as leaders.
Zone 2: Emerging Priorities
Practices adopted by roughly half (40-59%) of participants and represent emerging priorities.
Zone 3: Opportunities
Practices implemented by a minority (≤39%) of “early adopters” and represent opportunities for growth.
Our findings are shown in Figure 41 below. As shown in the table, practices that we’ve categorized under human capital management and employee health and safety are most widely adopted, which is consistent with our thesis that organizations have strengthened their focus on their people following the pandemic and cultural reckonings. Social practices related to governance and strategy are adopted by a middle range of participants, while practices related to human rights and Indigenous reconciliation are not widely adopted. DEI practices are unique in that they fall into all three zones, with foundational practices such as DEI policies and DEI training seeing wide adoption, while more outcome-focused practices such as diversity targets and third-party assessments are adopted by few participants.
This analysis reveals four critical insights:
1.
The rise of “S” is uneven and so is organizational performance. While organizations have an established body of knowledge and best practices for the traditional elements of managing human capital, organizational responses to complex and quickly evolving social issues – such as DEI, human rights, and Indigenous reconciliation – are lagging. These themes represent opportunities for organizations to position themselves as leaders and drive the market forward.
2.
There’s momentum behind a “social risk” lens. Most organizations are either adopting or considering formal oversight of social risks at the top of the house via the board of directors and/or enterprise risk management frameworks. Organizations that are not adopting or exploring social risk governance may fall behind their peers while market leaders set the pace.
3.
Getting the table stakes right is critical in the war for talent. Employees assign a high level of importance to the following social issues: training and development, investments in their physical and mental well-being, and DEI commitments. These have become “table stakes” value propositions among organizations, and those who fail to adopt them are gambling with their talent.
4.
Organizations are missing opportunities for real world impact. From Indigenous recruitment and procurement to diversity targets for management and human rights policies for supply chains, organizations are lagging the most on the actions most aligned with driving tangible social outcomes. Identifying and addressing barriers to progress in these areas is critical for organizations that want to effectively manage their exposure to social risks, tap into opportunities, and create long-term value.
Figure 41: Three zones of social performance
Zone 1:
Table Stakes
(≥60% adoption)
Zone 2:
Emerging Priorities
(40-59% adoption)
Zone 3:
Opportunities
(≥39% adoption)
Zone 1:
Table Stakes
(≥60% adoption)
Flexible or hybrid workplace
Training & development opportunities
Measuring/promoting employee engagement
Strengthening focus on employee health & safety since pandemic
Mental health & wellness benefits/perks
Physical health & fitness benefits/perks
Formal DEI policies/programs
DEI training for employees
Zone 2:
Emerging Priorities
(≥60% adoption)
Board oversight of social risks
Social risks incorporated into ERM
Human rights policy
Reconciliation training for employees
Diversity targets for board
Measuring inclusion in workplace
Zone 3:
Opportunities
(≥39% adoption)
Human rights policy for supply chain
Human rights policy for investments
Human rights due diligence process
Public support for Indigenous rights
Indigenous recruitment program
Indigenous youth advancement program
Procurement from Indigenous suppliers
Diversity targets for senior management
Third Party DEI Assessments
Flexible or hybrid workplace
Board oversight of social risks
Human rights policy for supply chain
Training & development opportunities
Social risks incorporated into ERM
Human rights policy for investments
Measuring/promoting employee engagement
Human rights policy
Human rights due diligence process
Strengthening focus on employee health & safety since pandemic
Reconciliation training for employees
Public support for Indigenous rights
Mental health & wellness benefits/perks
Diversity targets for board
Indigenous recruitment program
Physical health & fitness benefits/perks
Measuring inclusion in workplace
Indigenous youth advancement program
Formal DEI policies/programs
Procurement from Indigenous suppliers
DEI training for employees
Diversity targets for senior management
Third Party DEI Assessments
