Infographic: Raising the Impact of 'S' (in ESG) to Advance DEI

Author: Laci Loew

November 28, 2023

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When it comes to environmental, social and governance (ESG) factors, traditionally, organizations have focused on how the 'E' influences key leadership decisions. But is the sustainability of the earth more important than the social experience of the people that inhabit it? Most likely, HR leaders are in the nay camp. As such, the 'S' factor will emerge as a priority over the coming years in the same way that the 'E' has over the last ten years.

An organization's social license impacts the quality of peoples' (employees, leaders, partners, vendors, suppliers, community members, etc.) lives as well as the strength of an organization's performance (financial, market share, innovation, etc.). The context of that license is driven by diversity, equity and inclusion (DEI), which includes human rights, pay equity, perceived fairness, workforce diversity, sense of belonging, well-being and more.

Advancing DEI progress in socially responsible organizations is driven by leadership alignment and advocacy for talent democratization and an inclusive culture. It is enabled by data-driven insights and technology that mitigate workforce bias and marginalization.

To learn more about the meaning of 'S' and actions leading-practice organizations are taking to improve the impact of 'S', click here to view our infographic "Getting Started on Being a Socially Responsible Organization."

The Business Case

The impact of 'S' to advance DEI progress has measurable business benefit. Research indicates that leaders in socially focused organizations that implement DEI leading practices:

  • Report a four-month time-to-market advantage over competitors (71%);
  • Realize a vast positive impact on brand perception (68%);
  • Saw an extensive positive impact on talent recruitment and retention (64%);
  • Attest that DEI efforts positively impacted organizational agility (63%); and
  • Say they beat current fiscal year revenue targets by more than ten percent (36%).

The business case for socially responsible, DEI organizations is real and represents a significant opportunity for laggard organizations.

Social Responsibility is Here to Stay

While some argue that social license is just today's next fad, the majority subscribe to its ability to drive and shape decisions that promote a positive environment for all stakeholders. Oversight of socially responsible practices begins with executive leaders (Board of Directors and the C-suite including a Chief ESG Officer, Chief Sustainability Officer, or Chief Diversity Officer), and they are co-created among three constituents: HR, other business leaders, and the workforce.

Ignoring the DEI forces of social responsibility, or getting them wrong, can have a huge impact on the employee experience, business profitability and reputation. The maturity of organizations' practices will be part of what employees and other stakeholders look at when assessing affiliation and allegiance to an organization. High-impact leaders are in a race to have their organization rank at the top of the list of socially responsible organizations.

Is your leadership all-in on being socially responsible? Do you have a blueprint handy for getting started?