THE SOCIAL IMPACT OF ESG POLICIES: FOR A MORE EQUITABLE AND SUSTAINABLE FUTURE
Paco Romero, Head of Development and Alliances of the Zing Program. In collaboration with Juan Mezo, Managing Partner of Valores & Marketing.
ESG (Environmental, Social, and Governance) criteria are setting the agendas of investors when it comes to driving socially responsible investment (SRI) in a company. Leaving Corporate Social Responsibility (CSR) behind and extending the focus to the entire value chain of companies, ESG policies act transversally throughout the company, seeking positive economic, but also social and environmental impact results. Although in recent years there has been a greater focus on environmental aspects due to the major issue of global warming, the social impact is equally relevant as we show in this article.
We then delve into the “S”, the social impact of these policies from various perspectives.
Commitment to diversity and inclusion: Fundamental pillar of ESG criteria
The “S” has to do with quality employment. Companies are becoming increasingly aware and influential in including diversity and inclusion as a fundamental part of their real commitment to a more just and egalitarian society, with the inclusion of diversity not only improving their image, but also vital to their long-term sustainability. Inclusion means equal opportunities for all people, regardless of their origin, gender, race, ethnicity, sexual orientation, functional diversity, age or other factors that may generate discrimination. Having a diverse team enriches the company with a wide range of perspectives and approaches.
This commitment goes beyond mere public statements. Companies are implementing diversity and inclusion training programs, creating dedicated inclusion committees and conducting internal audits to identify areas for improvement. These actions not only foster a more inclusive work environment, but also attract more diverse and qualified talent.
What does it mean to incorporate inclusive talent?
Incorporating inclusive talent means making sure that everyone, regardless of the differences we talked about earlier, has the same opportunities. This means designing fair selection processes, implementing development programs for underrepresented groups, and creating an environment where everyone feels valued and respected. It is a daily commitment to building a fairer and more equitable workplace.
Incorporating inclusive talent also involves eliminating unconscious bias in the hiring process. Companies are using data-driven selection tools to ensure that hiring decisions are based on skills and merit, not personal bias. In addition, they are promoting pay equity policies and offering benefits that address the needs of a diverse workforce, such as flexible schedules, telecommuting, extended parental leave, variable non-monetary compensation in addition to salary that incentivizes workers.
Benefits of diversity in work teams
Diversity drives innovation, as different perspectives and experiences lead to more creative and effective solutions. In addition, diverse teams are often more representative of a company’s stakeholders, improving stakeholder understanding and satisfaction.
Companies such as Google and IBM (*) have reported that their efforts to increase diversity have resulted in more innovative teams and greater employee satisfaction. It can also improve decision making, as a diverse group is more likely to consider a wider range of options and avoid herd thinking. In addition, a diverse culture can enhance a company’s reputation and attract customers and partners who value inclusion. This demonstrates that diversity is not only an ethical issue, but also a smart business strategy.
The role of companies as agents of social change
Through their policies and practices, they can significantly influence society. Companies can lead social responsibility initiatives that address issues such as poverty, education and public health. They can also collaborate with non-profit organizations and local communities to promote sustainable development. Adopting ESG policies not only enhances corporate reputation, but also contributes to the overall well-being of society, community involvement and employee satisfaction.
Companies can act as catalysts for social change by implementing corporate volunteer programs, developing joint programs, donations and strategic alliances with non-profit organizations and incorporating employment for groups at risk of social exclusion or with special difficulties.
Involving all employees in ESG policies. Promoting a culture of collaboration and social commitment.
Creating a climate of collaboration and social commitment is essential for the success of ESG policies. This involves fostering values such as solidarity, empathy and respect within the organization. Companies can promote this mindset by implementing inclusive policies, training programs in social and emotional competencies, and recognizing individual and collective efforts in promoting sustainability and social responsibility.
To generate this culture of social commitment, it is essential to involve all employees. This means fostering an environment of participation where employees feel they are an integral part of the company’s social and environmental initiatives. Having a defined purpose and values that must be translated into concrete behaviors on a daily basis. Corporate volunteer programs, awareness workshops and continuous communication of ESG achievements and goals are some strategies to achieve this involvement and participation. By involving the entire team, companies can create a sense of shared purpose that drives engagement and motivation. Recognizing and celebrating ESG achievements, both individually and collectively, reinforces the company’s commitment to these values.
Engaging staff also means providing them with the tools and support to actively participate in ESG initiatives. This can include creating employee resource groups, offering sustainability training, and organizing events and campaigns that promote ESG values. Companies can also establish recognition and reward systems for employees who contribute significantly to ESG goals. Companies such as Salesforce encourage their employees to get involved with social causes by offering them the possibility of having 7 days a year (during working hours) to dedicate to volunteer projects in social organizations, a powerful example of commitment to society and awareness of current issues.
We could conclude by saying that ESG policies are not only a tool for economic and environmental sustainability and responsible governance, but also a powerful driver for positive social change. By committing to the environment, diversity and inclusion, incorporating inclusive talent and promoting a culture of collaboration and social engagement, companies can play a crucial role in creating a more equitable and sustainable future.
Sources consulted:
https://www.ibm.com/blogs/think/es-es/2022/07/06/por-que-es-importante-la-diversidad-e-inclusion-di/