Rachel Crossley, director of stakeholder communications at Emperor, considers the value of CSR initiatives during periods of turbulence and economic unrest.

When it comes to ESG (environmental, social and governance) issues, the ever growing regulatory requirements have led to a focus on environmental impacts, with the social side less developed. However, companies are starting to realise that targeted social programmes can help to address societal challenges while also driving business success. 

One example is social mobility initiatives, such as apprenticeship schemes to upskill workers from lower socio-economic backgrounds. These programmes support a more inclusive society by employing people from a broader range of backgrounds, while also enabling companies to access more diverse talent – an important issue given that talent attraction and retention was cited as a principal risk by 77% of FTSE 350 companies. 

At an event Emperor hosted in the summer, ‘Beyond compliance: Making social value meaningful’ Patrick Philpott, founder and CEO of Visionpath, noted that in the last couple of years social mobility has grown in recognition as an agenda item among businesses: “In 2009, the concept of social mobility was a bit niche and esoteric. Companies saw this as a problem for society and didn’t see why this should matter to them. Businesses now recognise that there are skills shortages so they need to widen their reach beyond their traditional, narrow pools of talent. They are seeing this as mission-critical from a talent, D&I and responsible business perspective.”

However, when it comes to reporting on social issues, there is a growing divide. A divide between those whose disclosures remain generic and compliance focused – including little more than stats on gender diversity, alongside photos of a fun run and a giant cheque – and those who are reporting in a more meaningful way on their activities and the impact they generate. 

Stakeholders are looking for the latter type of ESG reporting. It provides an insight into social strategies that demonstrate positive social and business impacts. 

Emperor’s most recent research into best practice FTSE 350 reporting explored this area and found 88% of reports reviewed discussed social issues where the company can make a positive impact. However, fewer companies explained how these issues aligned to their broader purpose and supported broader business success. Only 24% attempted to quantify their impact, adopting frameworks such as B4SI (Business for Societal Impact) to measure and enhance the impact and business benefits of their activities and demonstrate that social issues contribute to long-term success. 

Unless companies understand and measure the impact of their social strategies, they either risk the strategies themselves – and the good they do – by being unable to justify investment, or risk missing out on the competitive advantages they create. From attracting talent, to engaging employees and driving business performance and reputation, to positive stakeholder engagement – without meaningful reporting, based on concrete evidence and proof points, their contribution to business success will not be recognised. 

It is a time of growing scrutiny around business resilience in the face of seemingly relentless geopolitical, macroeconomic and meteorological events. This makes it more important than ever to develop and effectively communicate a meaningful social strategy.