ESG For Our Society

Over the last few weeks, we’ve looked at the overview of ESG investing and the “E” or environmental aspect of ESG.

As we enter a month of tightened Phase 2 measures in Singapore this week, there may be no better time to think about the “S” in ESG, especially as cost-cutting, furloughs and general uncertainty become commonplace due to the pandemic.

S, which stands for social, has long been overshadowed by its ESG counterparts, particularly environmental concerns. This is understandable as climate change continues to dominate conversation and “Social” concerns, which are less easy to define, tend to fall by the wayside.

As Bloomberg puts it, there are many variations behind the idea of social investing, but the common wisdom is that capitalism has obligations that go beyond shareholders and profit – investors and companies also need to consider their impact on customers, employees, local communities and general society. These parties give businesses “permission” to operate, and any threats to this consent can impact a business’ bottom line.

Changing social mores mean both stakeholders and investors will now scrutinise a company’s impact on people – both internal and external – more closely. Meanwhile, social movements such as Black Lives Matter and Me Too show how vital it is that companies support labour relations, diversity and inclusion.

Consider too, the potential fallout if a company is perceived to be exploiting disenfranchised communities, such as using child labour, underpaying workers in already impoverished communities or allowing them to work in unsafe conditions.

Conversely, recent studies show that positive social impact correlates with higher job satisfaction. McKinsey shared an example where randomly selected employees at an Australian bank who received bonuses in the form of company payments to local charities reported greater and more immediate job satisfaction than their colleagues who were not selected for the donation program.

Diversity in the workplace, meanwhile, should go beyond just “checking boxes” to fulfil a standard set of criteria. I’ve always encouraged my Team Leaders to hire individuals from different backgrounds and to foster a culture of “psychological safety”, so that employees with diverse experiences can confidently introduce new perspectives. This paves the way for new innovations and reduces the probability of blindspots and groupthink, which highly homogenous teams are sometimes liable to.

Many people today, especially millennials, choose to join companies expecting to feel accepted, challenged and given the space to grow. Successful companies recognize the importance of giving leadership opportunities and helping every employee to develop themselves personally and professionally. Doing this builds future leaders, creates brand evangelists and attracts and retains the best talent.

On the commercial front, our customers’ and partners’ interests are key considerations at Dedoco. Aside from our data privacy technological proposition, our commercial team emphasizes on responsible selling and transparent pricing so that clients make the best decisions for their budgets.

For many companies, how we manage the expectations of our stakeholders (shareholders, employees, clients and business partners) amidst the pandemic’s impact will throw our leadership and work culture into sharp relief. Showing how we support and add value to our stakeholders in a clear and transparent way will be especially critical during this time – and an imperative than an optional stance.

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