Why businesses are measuring social factors as part of their ESG performance

Environmental, social and governance (ESG) is quickly becoming mainstream, but corporates may find it difficult to tackle ESG with siloed efforts toward E, S and G. As more organizations prioritize human capital, racial equity and talent development, a new focus on the S — the social factors within ESG — is beginning to take shape. But how are enterprises responding to these challenges, and what can be said about the current state of transparency and measurement when it comes to reporting on these social factors?

In this episode, Bruno Sarda, Climate Change and Sustainability Services Partner at Ernst & Young LLP and Senior Manager Lucy Godshall are joined by Emily Bayley, Head of ESG, Private Sector at the World Economic Forum (WEF), and Ebony Thomas, Racial Equality and Economic Opportunity Executive at Bank of America. They discuss the focus that employees and institutional investors are placing on diversity, inclusivity, training, and health and safety. Finally, the importance of corporate culture and the potential impact on the bottom line.

Key takeaways include:

• The social factors in ESG are likely to become more important to investors and stakeholders.
  
• A strong focus on social factors can help to retain talented employees and subsequently have a direct impact on an organization’s bottom line.
• Organizations with strong social credentials will likely be better positioned to weather difficult times and business conditions.
• Stakeholders are looking for social metrics to be included in nonfinancial disclosures to help better measure and compare performance.
• The global business community is collaborating with public and private bodies to develop new metrics.

For your convenience, full text transcript of this podcast is also available. Read the transcript.