Society's demand for more diversity, equity, inclusion and close relationships with communities has put social ESG increasingly in the spotlight in companies.
Representation of minorities, for example, has gained relevance in the companies interviewed in the research Context, Message and ESG Journey, carried out by the consultancy Deloitte.
In this guide, you will learn more about what the social acronym ESG is, why this concept is important for companies and how they are putting it into practice.
What is ESG social?
The “s” in the acronym ESG (Environmental, Social and Governance) refers to social issues. Therefore, this concept refers to companies' relationships with employees, suppliers, consumers and surrounding communities.
This public that is interested in and impacted by the actions of a particular company is called stakeholders.
Social encompasses promotion of diversity heynclusion, security and well-being, labor rights and relationships that promote a better, fairer and more equal world.
These practices reflect companies' concern with relevant social issues, such as combat to the racism, gender equity, the inclusion of minorities and the fight against poverty.
What is involved in the social aspect of ESG?
In the corporate world, social involves human rights issues such as inclusion, diversity, work environment, responsibility to customers and community impact.
There are two categories of the social aspect of ESG: internal and external to the company.
The internal category includes issues of diversity, equity and inclusion, employee health and safety and labor relations.
What is external to the company are issues such as community relations, modern slavery, corruption, private data and product safety.
Furthermore, support for communities surrounding companies was highlighted as one of the 5 main initiatives by participating members of the Brazil Global Compact Network.
The data is part of the study “The evolution of ESG in Brazil”, made in partnership by Rede Brasil and the Brazilian Artificial Intelligence platform Stilingue.
How important is social ESG?
The importance of social ESG lies in the value generated by a business for society, customers and shareholders through inclusion, diversity and well-being for all.
In a country with high rates of feminicide, racist acts It is wage inequality, adopting social ESG practices in companies is fundamental for social justice and development.
In addition to complying with the quota laws for people with disabilities, companies must act in favor of issues racial, gender equality and the LGBTQIAP+ agenda.
The benefits of social ESG in companies
There are several benefits resulting from ESG investments social in companies that go far beyond financial and investment issues.
Companies that invest in social:
- Improve your image in the market;
- Increase your reputation;
- Attract new investors;
- Attract and retain talent more effectively;
- Value your brand;
- They build customer loyalty.
How is the development of social ESG in Brazil?
The development of social ESG in Brazil has been gaining strength, especially in the last two years post-Covid-19 pandemic.
Search from the consultancy Deloitte, in 2022, points out that 94% of the 374 companies consulted believe that Diversity, Equity and Inclusion (DE&I) strategies generate value.
This data is reiterated by the research by consultancy Mais Diversidade, December 2020, in which 97% of the companies interviewed said they intended to increase or maintain investments in social ESG in 2021.
How does social ESG relate to society?
Social ESG relates to society through inclusion and diversity practices, guaranteeing labor rights and valuing health and safety in the workplace.
Social ESG actions that dialogue with society include the positioning of companies in social causes and projects and their actions in the surrounding community.
Companies aligned with ESG social deal transparently with social, political and labor trends, exposing their actions and points of view in these areas to society.
Social ESG Examples
Examples of social ESG are the promotion of gender equity, gender and racial diversity and inclusion through the law on quotas for people with disabilities.
In the area of inclusion, iFood has a public commitment by 2025, have:
- 50% of women and 30% of black people in leadership;
- 35% of women in senior leadership;
- 40% of black people on staff.
In October 2022, the company reached the mark of 18% of black people in leadership positions and 30.8% of black employees — in 2019, these numbers were, respectively, 14% and 21%.
In the Impact Report, iFood shows the progress of its diversity goals. You can see the results of these actions in the online report, in the complete or in summarized.
Another example is that of Intel in Brazil, in which more than half of senior leadership positions are held by women.
From 2015 to 2020, the technology multinational invested 300 million dollars in human resources to hire more women and people from minority groups.
Leader in Merco ESG Responsibility Ranking in Brazil, The Nature More than half of its leadership positions are held by women.
7 tips to put into practice in companies
To put social ESG into practice in companies, it is necessary for the company to make an effort to engage senior leadership and stakeholders on social issues.
See tips based on the portal below SkillCast, ESG Dossier and the Sustainability and ESG Management Guide in companies.
- Identify social issues that concern the company from a legal and regulatory point of view, such as occupational health and safety, standards and rules;
- Be aligned with the Sustainable Development Goals (SDGs) of Global Compact from the UN, such as eradicating poverty, gender equality and reducing inequalities;
- Protect yourself against social washing, which is the dissemination of a false image of a socially responsible company;
- Scan the gaps where the company can meet existing social demands and where it actually meets these demands;
- Have a corporate communication strategy aligned with social ESG;
- Adopt a Private Social investment agenda for relationships with communities with systematic, professionalized action guided by a medium and long-term strategy;
- Define indicators and metrics for priority topics, such as fair work practices, diversity and health and safety.
