As we move into 2023, we expect to see some key trends develop in the world of ESG. Here we explore what they are and how SocialMarks can help companies address these.
Workforce wellbeing will be a priority
Across the globe, the cost-of-living crisis poses very real challenges. Companies will face increasing pressure to support their workers, especially those who are vulnerable, by increasing employee benefits, strengthening wellbeing strategies, and improving internal support. High on the 2023 agenda is curating a strong, positive company culture and prioritising employee wellbeing. This year hybrid-working will remain – but many will also return to the office. A strong company culture is needed to ensure employees are supported in their return.
SocialMarks evaluates wellbeing programs across four vectors: Innovation, Relevance, Reporting and Outcomes. Companies that score highly have programs with demonstrable impact that extends well beyond the specific timing of the program. It’s clear employee wellbeing and satisfaction are trends here to stay.
A focus on the ‘E’ of ‘DE&I’
A trend we are anticipating is a focus on the ‘E’ of Diversity, Equity & Inclusion. In response to Black Lives Matter and Stop Asian Hate in 2020, businesses updated their diversity processes to go beyond compliance and focus on doing ‘purpose-led’ business. A relatively new addition to the DE&I acronym, ‘Equity’ focuses on how specific historical and socio-political barriers can be overcome and giving everyone equal access to opportunities. This can be achieved through identifying and eliminating barriers and ensuring there is backing by company policies, practices, and procedures.
Businesses are seeking growth and continued success in an uncertain economic climate and having a strong approach to DE&I can help this. For example, research by LinkedIn Business found that businesses with a diversity team were 22% more likely to be seen as “an industry-leading company with high-calibre talent” and 12% more likely to be seen as an “inclusive workplace for people of diverse backgrounds.
Currently, we are seeing 40% of companies report any diversity targets – including employees of color, LGBTQIA+, employees who are veterans, and employees with a disability. These reported targets have been increasing, but companies who have targets seem to have more diverse teams. Our data also shows that internal networks, ERG participation and external recognition all show higher employee satisfaction and productivity.
ESG will become ‘just business’
Managing Director of ESG at Grant Thornton advocates for reframing ESG and sustainability as simply business – “it is just smart business to understand and manage those things that are levers for attracting more customers and investments [and] engaging your workforce, which all drive profitability.”
Deloitte’s Sustainability Action Report 2022 found that over half of executives anticipate benefits from enhanced ESG reporting, such as increased employee retention (52% of respondents said this is a benefit), improved return on investment (52%), stronger stakeholder trust (51%), and increased brand reputation (49%). This highlights that reporting on ESG is increasingly important and can have real benefits for the business.
We are seeing 90% of companies have either a CSR or ESG report – so what about the other 10% who currently don’t report on their ESG activity at all? Those companies are showing up bottom of the ranked list when it comes to ESG scores. In the current environment, merely reporting on your efforts can increase your visibility and value in the ESG conversation.
SocialMarks in 2023
2023 will see a rise in digital ESG reporting. With the introduction of tools such as SocialMarks, for the first time, companies will be able to access collated data which ranks and benchmarks their ESG performance. Companies are increasingly expected not only to monitor, but also report on ESG activity. SocialMarks is at the forefront of this trend, as it provides an accessible tool for companies to track, measure and benchmark their ‘S’ performance within ESG. Reporting requirements will become more rigorous in 2023 and as investors increasingly require robust data, this is more important than ever.
At SocialMarks, we pride ourselves in the quality of our data. Our analysts are sector experts who collect and benchmark ESG data. The tool is increasingly useful as a straightforward way for companies to see and benchmark their ESG data and that of their competitors. The need for this will only continue to grow as more companies adopt digital reporting practices. The trends highlighted above are shaping the field of ESG data, insights, and reporting – and SocialMarks can help with this.