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The Social Factor in ESG

The social factor examines the way in which a company organizes and manages its relationships with people. These people are primarily its own employees, but also the employees of its suppliers and finally its customers.

Thus, in general, a company is rated well on the social factor if it is able to retain, train and ensure the well-being of its employees. In this context, the notions of diversity, equality and inclusion are central. Beyond the promotion of gender equality, which has fortunately become unavoidable, it is a question of taking into account all diversities within the company (ethnic, LGBTQ+, disability, age). The prevention of work-related accidents, staff training and the promotion of "social dialogue" are also closely monitored.

The same expectations apply to the company's suppliers, and in fact to all elements of its supply chain (suppliers of suppliers). Indeed, in terms of image, there is no point in a company being virtuous if its suppliers are not. This subject is particularly sensitive for multinationals, from whom a lot is expected. They are multiplying controls internally and within their value chain, because they are afraid of being the object of a global bashing campaign. In the age of social networks, even a solid reputation can be destroyed very quickly.

Furthermore, the company must take care of the well-being of its consumers. By implementing all the means to respect the safety standards in force, of course. But above all, by not hiding anything about the exact composition of its products or their impact on health and the environment. The notion of dialogue is central here.

The stratesgy Readiness Check attributes exactly one third (33%) of its evaluation to social criteria. (29% for Environment and 38% for Governance).

For more information: www.stratesgy.com/readiness