Social Sustainability 101: The S in ESG

At its core, social sustainability is about the human impact of a business.

It includes everything from how employees are treated to the influence a product has on its consumers. The goal is to create a positive impact on the people who are touched by an organization or a project.

While terms like DEI (Diversity, Equity, and Inclusion), workplace wellbeing and human rights are an important part of the equation, social sustainability casts a wider net, considering the overall well-being of everyone involved in or affected by a business—from employees and customers to suppliers and the broader community.

Social sustainability is also a critical component of ESG (Environmental, Social, and Governance), representing the S in ESG (usually defined by Social Impact. While Social impact s the least defined of ESG metrics- there isnt may netrics- or stanards a you see for the othes E and G but it is a critical part of companes annual reporting expecations.

Why Social Sustainability Matters

A recent study by the World Benchmarking Alliance showed that 90% of the world's 2,000 most influential companies fall short of meeting fundamental societal expectations.

By prioritizing social responsibility, companies can:

• Positively impact their employees, customers, and communities

• Drive long-term business success

• Contribute to an equitable future

Beyond being the "right thing to do," social sustainability makes good business sense:

Happier, More Productive Employees

• Boosted productivity: Employees at companies with strong social responsibility programs are 12% more productive (Deloitte's Millennial Survey).

• Reduced turnover: These companies experience turnover rates 25% lower than the industry average (Cone Communications).

Stronger Customer Relationships

• Increased consumer trust: 83% of consumers prefer companies that share their values (Cone Communications).

• Higher customer retention: Businesses with a strong social reputation retain customers twice as long (Forbes).

Better Financial Performance

• Improved stock value: Companies with strong ESG ratings outperform competitors by 4% (MSCI).

• Attracting investors: Socially responsible investing (SRI) is booming, with over $30 trillion in assets under management (US SIF Foundation).

Reduced Risks

• Avoiding penalties: Proactive social sustainability can prevent costly fines and reputational damage.

• Staying ahead: Businesses that anticipate regulatory changes gain a competitive advantage.

Key Elements of a Social Sustainability Strategy

A strong social sustainability strategy should focus on these areas:

• Product Lifecycle

  • Consider your product's social impact from start to finish

  • Think about: Is it accessible? Safe? Sustainable?

• Workplace Culture

  • Consider the employee experience

  • Think about: Is it a a diverse and inclusive workplace? Are there workplace wellbeing initiatives?

• Supply Chain Responsibility

  • Consider whether there are ethical and sustainable practices throughout the supply chain

  • Think about: Are suppliers protecting human rights? Is there use of child labor in the supply chain?

• Community Engagement

  • Consider relationships with local communities

  • Think about: Initiatives including philanthropy, volunteerism, and partnerships that can create shared value.

• Measurement and Reporting

  • Consider what social performance metrics are important to your business and how they can be tracked.

  • Think about: What is required by regulations and what is important to customers and employees? Metrics smployee satisfaction, diversity and inclusion metrics, and community impact, is essential for accountability and continuous improvement.

Liveable's cutting-edge social sustainability framework pinpoints exactly what matters, optimizing your operations for maximum positive impact. We'll help you create a long term strategy, measure what matters, and continuously improve.

Measuring and Reporting Social Sustainability

Tracking metrics around human rights, employee satisfaction, diversity and inclusion metrics, and community impact, is essential for accountability and continuous improvement. To effectively measure and communicate social impact, companies should:

• Establish clear and measurable social performance indicators (KPIs) aligned with their sustainability goals.

• Implement robust data collection and reporting systems.

• Benchmark performance against industry standards and best practices.

• Disclose social performance information transparently to stakeholders.

In conclusion, social sustainability is a critical strategic imperative. By putting social good at the heart of their operations, businesses can lead the way in a rapidly changing landscape.

It's time to create a future where prosperity and people go hand in hand.

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