What are the metrics for social in ESG?

The “Social” component of ESG focuses on the company’s relationships and its reputation within society. It evaluates how a company manages relationships with employees, suppliers, customers, and communities. Here are key social metrics often considered within the ESG framework:

  • Employee engagement and diversity: This includes assessing workforce diversity, inclusion policies, employee engagement, and satisfaction levels. Companies with strong diversity and positive workplace cultures are seen as more sustainable and socially responsible.
  • Human rights and labour standards: This involves ensuring that the company and its supply chains respect human rights and labour standards, including child labour, forced labour, fair wages, and workers’ rights.
  • Community relations: Evaluating how a company interacts with the communities in which it operates, including community engagement, investment, and development programs, and whether the company engages in charitable giving and volunteering.
  • Customer Satisfaction: This considers how the company treats its customers, the quality and safety of its products, and its data protection and privacy policies.
  • Health and safety: Assessing the health and safety measures in place for employees, including occupational health policies, safety training, and records of workplace accidents and incidents.
  • Product liability: Evaluating the company’s responsibility towards ensuring the safety and integrity of its products, including adherence to quality standards, product recalls, and liability for product defects.
  • Data protection and privacy: Assessing how the company protects customer and employee data, complies with data protection laws, and its history of data breaches or violations.
  • When you use these metrics to gauge your social responsibility, you contribute to long-term value creation.