What comprises the S in ESG?
The social component of ESG speaks to the relationships a company, government organization or nongovernmental organization has with people. It centers on leadership, diversity, equity and inclusion (DEI), human rights, teaming, community, and maintaining a healthy corporate culture.
Social considerations include labor policies such as fair pay and relationships with suppliers (and their labor policies), customers and communities. It also includes legal obligations such as the U.S. Foreign Corrupt Practices Act, which outlaws bribery, and the European Union’s General Data Protection Regulation, which preserves data privacy.
Companies are responsible for the health and safety of their workforce, for training and for improving working conditions broadly — being a force for good that provides opportunities for all, irrespective of differences such as gender, gender identity, sexual orientation, racial or ethnic background, or abilities.
The S also takes form in different ways in different sectors, such as striving for financial inclusion in the financial services industry, bridging the digital divide in the technology, media and telecom industry, and achieving health equity and access in the health care industry.