Addressing Social Impact
As environmental, social and governance (ESG) reporting gains momentum globally, companies make significant progress tracking and documenting their environmental and governance practices. Heightened awareness of issues like wealth disparity, discrimination, unhealthy and unsafe workplaces, and violations of fundamental human rights escalate the need for companies to address the social pillar of ESG.
However, corporations find that analyzing the social impacts of their business activities and supply chains represents a more complicated, abstract endeavor. The consequences of such analyses resonate through the supply chain, yet can prove challenging to track and quantify. The 2021 ESG Global Survey from the international banking group BNP Paribas indicated that 51% of respondents ranked social factors as the most challenging to analyze and integrate. Challenges associated with social reporting include lack of standardization, difficulty obtaining meaningful data and lack of supply chain transparency.
The global pandemic further complicated matters by triggering supply chain disruptions, labor shortages and healthcare problems that have aggravated instances of social injustice and disrupted efforts to improve supply chain visibility. Unfortunately, a survey from Refinitiv found that under mounting pressures during the COVID-19 pandemic, 65% of organizations took shortcuts with Know Your Customer (KYC) and due diligence with their supply chain partners.
In light of changing marketplace demands, savvy organizations will establish plans and frameworks for social impact analysis and reporting.
In this white paper, UL will:
- Explore the components and drivers of social impact reporting.
- Consider the benefits of addressing the social aspects of ESG.
- Propose strategies for increasing visibility into social impacts across the supply chain.
- Identify resources to support the social portion of ESG reporting.