Employers today are facing a watershed moment in the environmental, social and governance (ESG) focus spurred by the societal, geopolitical and economic turbulence of the past few years. As issues of workplace flexibility, equity and diversity, and the climate crisis (to name a few) reach a boiling point, companies increasingly are expected to take actions that make a substantive impact. Companies must learn — and adopt — ESG as critical to business success.

ESG is no longer only a moral imperative, but a business one as well. And, while much of the ESG conversation to date has centered on sustainability initiatives, attention is shifting toward the social or “S” goals companies establish, track and share. Below are three social areas of focus for companies to work on in 2023 and beyond.

Employee wellness and personal development

For many of the 160 million people in the U.S. workforce, the past two years have blurred the lines between professional and personal lives, sometimes resulting in feelings of isolation and widespread burnout. Consider that in 2022 alone, 2 in 5 workers reported that their work environment had a negative impact on their mental health. What’s more, employees with high stress levels are more likely to miss work or show lower engagement, which can affect a company’s bottom line.

Thankfully, for leaders willing to prioritize mental health and personal development, a positive culture shift is within reach. For example, benefits such as “mental health” or “no meeting” days, wellness breaks, and even short-term disability coverage can go a long way toward bolstering company morale. Particularly in times of uncertainty, building a culture of trust and flexibility has been shown to promote employee engagement, leading to higher productivity, talent retention and overall satisfaction.

Equality, diversity and accessibility at work

Equality, diversity, inclusion and accessibility are well-established hallmarks of most companies’ “S” goals. It is de rigueur for companies to gather and share data on how they ensure equality across racial, cultural, generational, gender and other dimensional lines, including intersectional. In fact, a staggering 76% of job seekers state that a diverse workforce is a factor in evaluating prospective employers. Diverse companies enjoy 2.5 times higher cash flow per employee, and gender-diverse companies in particular are 15% more likely to exceed their industry’s median financial returns.

Mentorship and especially sponsorship are also powerful tools when it comes to boosting employee morale and engagement. In fact, recent research shows that inclusive mentorship programs can be instrumental in attracting and retaining diverse talent — with women and minority groups more likely to say that mentorship and sponsorship are valuable parts of their career development.  

Making a difference in the community and for the environment

It’s no surprise that companies choosing to “make a difference” will continue to feature prominently in 2023 and beyond. Employees and consumers want the companies they support to stand for something, with 70% stating their sense of purpose is defined by their work.

Companies need to use employees’ sense of purpose to guide executive decisions — and track the progress of their commitment — so employees see leaders talking the talk and walking the walk. Easy-to-implement initiatives such as volunteer days, fundraisers, donation-matching and environmental pledges to combat the climate crisis are all great examples of mutual aid that can profoundly benefit a company’s entire workforce and the earth.  

Entering a new era of ESG

In many ways, the turbulent early 2020s accelerated progress in addressing issues long needing change. Employees, shareholders and consumers have all clearly voiced the values they care most about, and companies must simply listen and respond.

The companies that thoughtfully and consistently invest, measure and share progress on their “S” programs will thrive. Will your company be one of them?

Read the full report here.