The “social” in ESG can have large impacts on both the “environmental” (E) and “governance” (G) aspects. It is so important to think about how your business whether small, medium, or large can act in this space to create a holisit approach to sustainable business practices. How does social support environment and governance more specifically?
1. Social Impacts on Environmental (E):
- Environmental justice and community health: Social impact initiatives can focus on equitable access to water, clean air, green spaces, particularly for under-prepresented and historically marginalised communities. This is a way to address environment and nature whilst also looking at environmental injustices that disproportionately impact vulnerable people and populations. This can generate a healthier environment for all which is good for people, planet, and your business
- Employee and community engagement in sustainability: Socially responsible businesses can foster engaging and fulfilling internal cultures of environmental and social impact leadership by providing employees and communities sustainability initiatives and projects to participate and lead in. This can take many forms such as actions within a company that an employee can take, employee-volunteering schemes with access to project platforms like ours to provide an exciting array of projects to support (this can also provide learning and development opportunities) etc. Engaging in such activities can have positive ripple effects on overall impact but it is key to make sure you track and measure what you are doing to be able to tell that story.
- Inclusive environmental innovation: By investing in social initiatives that promote equity, diversity, accessibility, and inclusion, businesses can unlock diverse perspectives and ideas that lead to more innovative and sustainable environmental and business solutions. It is so key to know and understand that diversity does not stand alone but must be done in a truly inclusive and equitable manner. If this is something you want to look into more or improve you can contact us.
2. Social Impacts on Governance (G):
- Enhanced ethical standards and accountability: A strong focus on social impact should include ethical treatment of employees cross a business, support human rights, and have fair labour practices. Having these values, operating to them, and reporting on them enhances accountability which in turn enhances governance policies and ethical decision making.
- Diversity and inclusion in leadership and decision-making: Social initiatives often emphasise diversity, equity, and inclusion (DEI), encouraging diverse representation within leadership and different levels of seniority. Diverse boards and leadership teams are linked to better governance as they bring a range of perspectives, life experiences, educational levels, cultures, reduce groupthink, and improve decision-making processes, which can lead to more resilient and forward-thinking governance.
- Improved stakeholder trust and compliance: Socially responsible companies tend to be more transparent at what they are doing both when getting things right and celerbating them as well as when they’ve tried and got something wrong and need to try again. Young people we have worked with at Known Impact always say how they admire this, companies sharing learnings and trying again and how it has increased brand recognition, trust, and loyalty for them. Focusing on social impact more can improve how businesses managing stakeholder relationships which strengthens governance. This transparency builds trust among employees, shareholders, and regulators, ensuring smoother operations and enhancing the company’s ability to meet regulatory requirements effectively.
To summarise, social impact initiatives and projects create a solid and holistic foundation for environmental responsibility and ethical governance by embedding values of equity, fairness, and inclusivity across all aspects of the business. Also, you need people to do everything you are trying to achieve so it makes sense to put cared thought into what you can do with and for them as a collective to benefit people, ESG as a whole, and your business. This integrated approach not only strengthens the individual pillars of ESG but also enhances the business’ reputation, resilience, and long-term sustainability.
