Research:
Data and Insights
Intro to data and Insights
When the Covid-19 pandemic struck in 2020, many market participants and observers hailed the rise of the ‘S’ in ESG. While climate change and environmental issues had dominated the ESG conversation up to 2019, many speculated that the emergence of a global health emergency, which disproportionately impacted the most vulnerable in society, would catapult social issues to the forefront. What is certain is that the pandemic was both the catalyst and backdrop for a series of social reckonings that are, at a minimum, reshaping the landscape in which businesses operate and, beyond that, reshaping the cultural values and priorities that define the purpose of business in society.
What is certain is that the pandemic was both the catalyst and backdrop for a series of social reckonings that are reshaping the cultural values and priorities that define the purpose of business in society.
In 2020, office-based employees were thrust into a new world of remote work. Many faced burnout, anxiety, isolation, or depression while navigating an unimaginable health crisis, juggling parenthood, and coping with the loss of loved ones. Employees working in essential services, hospitality, travel, retail, and other industries did not have the luxury of working remotely, and thus faced higher risk of COVID exposure, alongside severe financial stressors such as layoffs and furloughs. One of the outcomes of the pandemic, which both amplified and exacerbated socio-economic inequality, is an unprecedented conversation about the future of work, and signs of a revival of the labour movement. Together, these dynamics have transformed power relations between employees and employers.
The year 2020 also saw the murder of George Floyd, a Black man, by a White police officer in the American city of Minneapolis. Captured on video and blazed into public consciousness, Mr. Floyd’s brutal and gut-wrenching death became the apotheosis of a long history and deeply entrenched culture of violence against Black people. Millions in the U.S., Canada, and around the world, took to the streets to protest anti-Black racism, sparking a movement to address systemic racism and to remove barriers to the advancement of Black people.
About a year later, in 2021, hundreds of unmarked graves of Indigenous children were found at former residential schools in Canada. Indigenous children were involuntarily sent to these boarding schools – which were established and funded by the federal government and operated by churches – to be stripped of their families, culture, language, and religion for the purpose of assimilating them into Western society. While Indigenous Canadians had spent decades searching for the bodies of loved ones who never returned from these schools, the discovery of these unmarked graves sent shockwaves through Canada and the world, as the horrors of colonialism took physical form. The result was a renewed call for action on Indigenous rights that reverberated across Canada and around the world.
While the societal and business implications of these overlapping socio-economic, historical, cultural and racial reckonings continue to unfold, one thing is clear: social issues are essential considerations for anyone trying to build, run, or grow an organization in our time. They simply cannot be ignored.
Against this backdrop, key questions arise: What is the state of social practices in 2022? How are organizations adapting and managing their social performance in this new era? What are employees’ expectations, and how do they evaluate their employers’ progress? How can organizations benchmark their practices against others? We developed this research project to start to answer those very questions.
What is the state of social practices in 2022?
How are organizations adapting and managing their social performance in this new era?
What are employees’ expectations, and how do they evaluate their employers’ progress?
How can organizations benchmark their practices against others?
This report represents the first attempt we are aware of to establish a set of practical benchmarks across six key areas of social practices for organizations operating in Canada and the United States:
In addition to examining organizational priorities and actions related to these six themes, we also conducted research to understand Canadian and U.S. employees’ perspectives and expectations. Using Argyle’s Public Relationships Index, conducted by Leger Research, we surveyed employees to ask how important these issues are to them and how salient they are to the success of their organizations. Further, we asked them to rate their employers’ performance in each area.
We acknowledge there are many other material social issues not covered in this report. To work within our capacity, we limited our scope to the above themes based on a combination of business trends and materiality to organizations operating in Canada and the United States. This research represents a starting point that we hope to build on alongside others who are keen to help develop and advance the market with respect to the incorporation of social issues into business decisions.
This report is organized as follows. After outlining our methodology and sample characteristics, it provides the survey results and commentary for the six aforementioned social themes. Following our presentation of the results and accompanying commentary for each theme, we present the employee perspectives we gathered on these same issues. Next, we analyze survey data from organizational participants with the highest levels of conviction to social practices to gain some helpful insights about the state of the market. We then identify the Three Zones of Social Practices: (1) Table Stakes, which refers to widely-adopted social practices that represent business imperatives; (2) Emerging Priorities, which refers to practices adopted by a large enough cohort to represent emerging trends; and (3) The Opportunity Zone, which refers to areas of social practice that are less developed among survey participants and represent opportunities for growth.
Methodology &
Sample Characteristics
Organizational Survey: July 2022
Data was collected via an online survey that was circulated by email to a targeted group of 129 of the Research Partners’ organizational clients with operations in Canada and the United States. It was further shared via the Research Partners’ LinkedIn pages and several supporting organizations’ newsletters and social media channels. Since the dynamics and dialogues around social issues vary widely around the world, organizations operating in Canada and the United States were targeted to generate a coherent and comparable dataset.
Some participants did not provide data for some of the questions, so we have included a note below each of the charts to indicate the exact number of participants for each question, represented as “N = X.”
0
Organizations
Participated in the survey, including some of the largest companies and insttutional investors operating in North America. The public companies that participated in the research represent a combined market capitalization of
0
trillion
In assets under management and administration.1 Additional participant characteristics are summarized below.
Figure A: Location of Participants’ Headquarters
Which of the following best describes your organization?
As shown in Figure A, most survey respondents (85%) are headquartered in Canada, with 49% operating primarily in Canada, 19% operating globally, and 17% operating across North America. A minority of survey respondents (8%) are headquartered in the United States, half of whom operate globally while the other half primarily operates domestically. Seven percent of our survey respondents are headquartered outside North America with operations in Canada and/or the United States.
No Data Found
No Data Found
Figure B: Participant Organization Types
Which category best describes your organization?
As shown in Figure B, the majority of survey participants (58%) are companies, with 36% publicly listed and 22% privately held. These companies’ sectors are detailed in Figure C below. Approximately one-fifth of survey participants (19%) are institutional investors, composed of 14% asset managers and 5% asset owners. Non-profit organizations make up 12% of survey participants, while financial institutions account for 7%, crown corporations make up 3%, and a government agency accounts for 1% of the sample.
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Figure C: Sectors of the 42 Participating Companies (Public and Private Combined)
Which industry or economic sector best describes your organization?
No Data Found
Figure D: Participant Organization Size
Number of Employees
Figure D shows that approximately half of survey participants (47%) are large companies with 500 or more employees. Nearly a quarter (22%) of participants are mid-sized companies with between 100 and 499 employees, and about one-third (31%) are small companies employing 99 or fewer employees.
No Data Found
Employee Survey: August 2022
Argyle commissioned Leger – the largest Canadian-owned market research firm – to send an online survey to its proprietary online panel and results were calculated for 1,002 working Canadians aged 18+ and 1,000 working Americans aged 18+. The respondent profile from each country was designed to reflect the demographic of working adults in each country as closely as possible. These data serve as a proxy for the general opinion of the working public; importantly, the data were not collected directly from the employees of organizations participating in the research. A conventional margin of error cannot be associated with this web panel, but for comparative purposes, a probability sample of 1,000 respondents would have a margin of error of ±3.1%, 19 times out of 20.
Where do they work?
Virtually all respondents work in the same country in which they reside, and the majority of the organizations where people work are headquartered in the country in which they reside. Approximately 7% of Canadian employees work for companies headquartered in the U.S., while 13% work for a Canadian company with operations in the U.S. and/or across the globe. While few U.S. employees report working for an organization head-quartered in Canada, more than a quarter work for a company with operations across North America and/or the Globe.
Figure E: Respondents’ Organization Headquarters
Approximately 55% of those surveyed work for a small or mid-sized company, while the remaining work in larger organizations of over 500 people (see below Figure F).
IMPORTANT (NET) CANADA
Base: All working Canadians (n=1002)
IMPORTANT (NET) USA
Base: All working Canadians (n=1000)
87 %
have a CAN HQ
2 %
have a CAN HQ
7 %
have a USA HQ
84 %
have a USA HQ
Figure F: Respondents’ Organization Size
Approximately one-quarter of respondents in both Canada and the U.S. work for a privately held firm (27% and 26% respectively), while about 10% report working for a publicly listed company. Approximately 5% of respondents report working for either a financial institution or institutional investor. In terms of industry, the majority of respondents in both Canada and the US work in Health care, Government, Education, and Consumer Discretionary industries.
IMPORTANT (NET) CANADA
Base: All working Canadians (n=1002)
IMPORTANT (NET) USA
Base: All working Canadians (n=1000)
55 %
are small or medium sized
55 %
are small or medium sized
Recommendations
Reflecting on this research and the four critical insights revealed in the previous section, we make the following recommendations for organizations that wish to strengthen their social practices and position themselves as leaders on the increasingly important ‘S’ in ESG:
1.
Organizations seeking to lead on social issues must do so with authenticity. A thoughtful approach to social issues requires organizations to engage with internal and external communities to identify key issues and expectations for short–, medium– and long–term action. Leading organizations acknowledge that perfection is not the end objective. Rather, leaders demonstrate the courage to make progress on social issues over time, rather than waiting until best practices are defined by others.
2.
Leading organizations acknowledge that social issues can pose material financial risks, if not proactively identified and managed. Organizations should not wait until risk events occur as the reputational and brand impacts alone can be significant and long-lasting. Leading companies should proactively apply a social risk lens to all strategic and operational decisions, including the allocation of capital and internal resources. A proactive approach to social risk management will enhance the resilience of companies over the long term, and avoid costly risk events by building trust with internal and external communities.
3.
While organizations must consider multiple audiences and issues when developing and communicating their social practices, no organization can avoid human capital issues since all organizations require people to work within them, supply them, and purchase from them. As such, talent acquisition and retention should be a primary focus. Increasing understanding of what matters to current and future employees, and integrating that knowledge into employee engagement, retention and recruitment strategies is key.
4.
Leading organizations can initiate pilot projects to build the business case for real world social impact. The findings from pilot projects can be used to scale-up investments in social practices and support the development of best practices. Leaders have an opportunity to contribute to the eventual development of global standards to communicate to stakeholders on real world impacts of social investments.
