let’s not forget the ‘S’ in ESG

Last month I reflected on giving nature a seat at the table and there has been a lot of momentum building in this area including Apple creating an innovative storytelling video with Mother Nature having a seat at the table. 

We gave Mother Nature the head seat at the boardroom table at UTS Business School for an Abundium ESG ‘My Kitchen Table’ chat with Tim Hodgson, the CEO and Founder of My Net Zero who are on a mission to help unlock the barriers to climate action and create direct pathways to action organisation’s Scope 2 and Scope 3 commitments, and beyond, by reducing employee related carbon emissions. 

During the interactive session we all shared our individual sustainability stories and heard Tim’s inspiring journey to set a net zero plan for his household. We then got practical and mapped our own plans to take home, discuss and implement with our loved ones.  

We wrestled with the challenges of individual action, didn't shy away from the challenge for apartment owners and renters, shared our personal experiences, tips and ideas, built our own roadmaps to decarbonise at home, and thought about how our influence in our organisations can help our people to do the same.  

Let’s not forget the ‘S’ in ESG  

This month I thought a lot about the ‘S’! It's the social component of the Environmental, Social, and Governance (ESG) movement. The challenges and opportunities we face are systemic and need proper consideration. 

For example, it's been reported that tens of thousands of child slaves work in inhumane conditions in cobalt mines which is a material used in numerous products - including the lithium-ion batteries in many electric vehicles and rechargeable phone batteries.  

We need to keep a strong focus to eradicate modern slavery through the supply chains as we charge forward with the transition to net zero.  The 'S' is vital in this regard.

Our friends at UTS recently facilitated a cross-industry roundtable on this topic including exploring how we can use education and training to move organisations beyond a "culture of compliance" to achieve cultural change that structurally embeds human rights considerations in organisational processes and decision-making. 

One of the most holistic approaches to ESG which I’ve seen to date is how Unilever, previously led by Paul Polman, embedded social factors at the heart of their business strategy. They even became  B Corp certified in the ANZ region which awards those “businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.” 

Unilever's ambitious Compass Commitments  provides “a roadmap and strategy for delivering an ambitious sustainability agenda that works to drive climate action to reach net zero, reduce plastic as part of a waste-free world, regenerate nature and agriculture, and raise living standards in our value chain.” 

I love that this is accessible for all businesses to see and learn from. You can view Unilever’s Sustainable Living Plan 2010 to 2020 Summary of 10 years’ progress here. 

In my desktop research on this topic I found this recent article written by Xynteo Managing Partner Jonah Grunsell, “The importance of renewing focus on the ‘S’ in ESG”. Jonah shares; 

In today's dynamic business landscape, the integration of social consciousness and inclusivity within supply chains is crucial. Enterprises that prioritise these principles not only contribute to a fairer and more equitable world but also gain a competitive edge through the fostering of stronger relationships with diverse stakeholders.

He gives some practical ideas on how companies can embed social consciousness and inclusivity within their supply chains including: 

• Forging partnerships with a diverse supply base, particularly those within underrepresented groups such as women, minorities, and social enterprises. 
• Ensuring fair labour practices and ethical sourcing including regular audits, transparent supplier relationships, and collaboration with industry initiatives promoting ethical practices 
• Providing suppliers with training, resources, and support 
• Prioritising local suppliers and supporting small businesses within the community

Some of the impacts of progressing at a rapid speed on the race to net zero won’t be known yet.

What I’ve learnt is to keep open, humble and curious in an ever-changing landscape and encourage others to do the same. If you’re committed to one direction and new information emerges that it’s not the right one, take a step back and be brave to course correct. 

Let’s not forget the S in our ESG strategies, social factors need just as much attention, the well-being of people is key to creating a better world.