Sustainability Strategies And Their (Long-Awaited) Social Awakening

Sustainability Strategies And Their (Long-Awaited) Social Awakening

On August 8^th, the US banned imports from five more Chinese businesses over alleged human rights abuses involving the Uyghurs, as part of its effort to eliminate goods made with forced labour from American supply chains. The tally – under the Uyghur Forced Labour Prevention Act Entity List - now stands at 70 firms, tied to products including cotton apparel, automotive parts, vinyl flooring and solar panels.

Against the backdrop of an amplified social regulatory movement, firms are struggling to incorporate social concerns into their ESG and sustainability strategies (see Verdantix Strategic Focus: Unpacking The S In ESG Regulations). In particular, organizations are facing an intensifying global crackdown on modern slavery and looming litigation and reputational risks associated with bad social disclosures and performance (see Verdantix Modern Slavery, A Corporate Saga: Coming Soon To A Firm Near You). Unsurprisingly, the World Benchmarking Alliance found that 90% of the world’s 2,000 most influential firms do not meet social expectations relating to ethical conduct, decent work conditions and human rights.

While businesses in different regions and industries are trying to prioritize and address disparate social issues – depending on the materiality of concerns and specific regulatory pressures – there are some common challenges that apply to most organizations, across sectors and regions:

• Struggling to accurately measure, predict and benchmark social performance, as this often entails understanding lived experiences that are rarely easily quantifiable.
  
  
• Contending with the variability of social values and expectations across regions, which complicates the implementation of a one-size-fits-all approach that resonates both globally and locally.
  
  
• Owing to the politicization of social factors, businesses might hesitate in proactively and openly engaging with social issues. In July, Microsoft became the latest tech firm – after Google, Meta and Zoom – to downsize its DEI programme by laying off its DEI team, after pouring millions of dollars into the initiative, in light of ‘changing business needs’.

An intentional and systematic approach is essential for firms to translate social performance ambitions into effective actions. The complexity of social factors requires businesses to adopt multifaceted strategies, engage with diverse stakeholders to enhance the relevance and impact of social programmes, and continuously adapt to evolving social dynamics. Crucially, firms cannot achieve social sustainability alone – external methodologies and frameworks, digital tools, consultants’ expertise, and sectoral collaboration can amplify social impact and drive systemic change.

Interested in enabling your business to contribute to faster and more scalable social impact? Please read our report Verdantix Best Practices: Weaving Social Into ESG And Sustainability Strategies, where we have identified effective strategies for firms to incorporate social factors into their ESG and sustainability strategies.