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The S in ESG: A Spotlight on Social Issues

From subjects such as discrimination and inequality, to abusive workplace practices, the impact of a company’s social performance is increasingly coming into focus. 

In response to this focus, and the undeniable value of the needs that underlie it, the International Sustainability Standards Board (ISSB) has hinted that there is a strong likelihood it will include social issues in its future agenda priorities. 

This is welcome news. 

In a commentary on these proposed changes, a guest writer for the Responsible Investor advocates for the inclusion of social issues within ESG frameworks, and highlights the importance of doing this in a comprehensive manner. The balancing of the economic, environmental, and social aspects of a company’s sustainability performance are, the writer suggests, a necessity, if social considerations are to be integrated holistically. 

It is proposed that ISSB should adopt a pragmatic approach by leveraging existing social indicators, such as labour standards, human rights, and diversity, while fostering an adaptable framework to accommodate diverse organisational contexts. There is an intricate interplay between social concerns and a company’s long-term viability, and ignoring social dimensions could result in skewed assessments of sustainability. 

Evidence of the financial materiality of social issues is all around us in the form of lawsuits, new regulation, operational disruptions and costs, and reputational harm. Examples include forced labour and child labour in factories and field, workers on poverty wages, safety failures or poor community relationships at mining operations, data privacy breaches, dangers of algorithms in social media platforms, or the systemic risk of inequality.


esg, social issues, responsible investing, sustainability, executive search, recruitment, asset & wealth management

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