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Sustainability and Social impact ESG in 2024

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Sustainability and social impact ESG in 2024

Collaboration over competition, the “S” in ESG, comprehensive data, and more.

BY SUSAN MCPHERSON

The landscape of corporate responsibility today looks substantially different than 10 years ago. As the industry continues to evolve, face political backlash, and deal with more complex business and societal issues, we’re beginning to see an increased focus on companies’ most valuable asset, their employees and workers. According to JUST Capital’s 2023 rankings of America’s most “just” companies, the top three companies share a clear commitment to addressing worker issues and investing in employees.

Businesses are catching on and turning their attention to how they can better support their people—including contingent employees such as freelancers, contractors, consultants, and vendors—as well as investors, customers, and communities at large.

We’re seeing more initiatives than ever being created to guarantee that not only products and services but also policies and procedures are adopted to better ensure that workers can thrive in all aspects of their lives. For example, many companies have prioritized offering benefits that address specific midlife health and lifestyle concerns, while research suggests that benefits tailored to employees’ needs can have an impact on retention and performance. This shift has most certainly been informed and accelerated by changing quality of life dynamics and quickly evolving technology, the likes of which have made AI a reality across sectors.

The current political climate also influences how businesses have (and have yet to) shown up for people. Globally, we’re witnessing several active conflicts unfold, while 2024 will be the largest election year in history, with more than 40 countries going to the polls. That’s more than 40% of the world’s population. As we look ahead, the state of democracy will also play a key role in what’s next for business.

I asked several experts in the field to gather insights on how sustainability will continue to grow and evolve in 2024. Here’s what they had to say:

IT’S TIME TO FOCUS ON THE “S” IN ESG
This year, experts believe that people will take center stage with businesses making greater commitments to prioritize, measure, and improve quality of life. According to Jennifer Fisher, human sustainability leader at Deloitte: “The “S” in “ESG” has been living in the shadow of “E.” However, leaders and organizations are increasingly realizing that our biggest societal and environmental challenges can’t be solved if people aren’t thriving.

In the next few years, I think the “S” will become a bigger focus on the C-suite agenda and leaders will be investing more in human sustainability, which refers to the degree to which an organization creates value for people as human beings. It considers all people in contact with the organization: not just current workers, but also future workers, extended (contingent, gig, or external supply chain) workers, customers, investors, communities where the organization operates, and society broadly.

I predict that leaders and organizations will not only reflect, but also act on the role they play as stewards of human thriving, making greater commitments to prioritize, measure, and improve human outcomes within their spheres of influence.”

Alison Taylor, executive, NYU Stern School of Business associate professor, and author of the forthcoming book, Higher Ground, added the importance of worker voice as it relates to ongoing conflict: “The focus on worker rights and voice will continue to escalate. Hopefully, we will have a more realistic and sober conversation about how and when corporations seek to advocate for or represent their employees, especially given the ongoing conflict in the Middle East.”

BUSINESS HAS A ROLE TO PLAY IN PROTECTING DEMOCRACY
This year will be a pivotal one in global politics. Taylor believes that corporate political spending and influence will face more scrutiny than ever this year: “I’d say there will be two big themes for 2024. The most obvious one is corporate political responsibility, both domestic and international.

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With a fraught and turbulent election year, we can expect renewed scrutiny over political spending and influence and the revival of questions on what corporations should and shouldn’t be doing to protect democracy.” Organizations such as Leadership Now Project and Business for America are actively engaging with private sector leaders to ensure the United States has both a strong democracy and economy. Each organization regularly shares insightful research and educational materials that business leaders can turn to throughout the year.

PRIORITIZE COLLABORATION OVER COMPETITION TO REACH SHARED GOALS
As corporate responsibility continues to mature in 2024, businesses are moving away from operating in silos towards a more collaborative, mutually beneficial environment. Jeannette Ferran Astorga, executive vice president of corporate affairs, communications, and chief sustainability officer at Zoetis, shared: “In 2024, we expect to see more collaboration versus competitiveness, as companies seek to achieve common goals such as emissions reductions across the value chain. As an example, agriculture, food, and livestock received significant interest at COP28, and improved animal health emerged as a clear climate solution.”

ENSURE THAT SUSTAINABILITY-RELATED SKILLS ARE INTEGRATED INTO VARIOUS ROLES ACROSS THE BUSINESS
When thinking about the workforce that will support business collaboration, Dave Stangis, partner and chief sustainability officer at Apollo, believes sustainability skills will become even more important to various roles within a company. He added: “Despite a fluid global geopolitical landscape, I see sustainability taking a more interconnected higher ground in 2024. With increased global attention, I think we will see greater focus on value creation—both for businesses and society. We’ll see growing attention to adaptation and resilience as more people see the connection between our oceans and severe weather around the world. The sustainability profession has grown immensely over the past decade. This year will continue the expansion and integration of sustainability skills into other corporate roles—especially finance, legal, and strategy.”

ACCESS TO COMPREHENSIVE ESG DATA AND RIGOROUS REPORTING CAPABILITIES WILL BE ESSENTIAL
Comprehensive financial data and reporting have long been available. According to Pamela Gill-Alabaster, global head of ESG & sustainability at Kenvue, ESG data and reporting should be based on the same rigor and assurance. “I believe among the greatest challenges, beyond decarbonizing everything we do, will be addressing the mounting global regulatory requirements for enhanced disclosure of ESG-related impacts, risks, and opportunities. It will become increasingly important to have access to upstream and downstream value chain primary data and the ability to report that data with the same rigor and assurance used for financial reporting. These pressures will likely foster greater collaboration between the ESG function and the financial comptroller’s office and drive demand for better tools for data collection, governance, measurement, auditability, and reporting.”

DOUBLE DOWN ON COMMITMENTS TO MOVE FROM FOSSIL FUELS TO RENEWABLE ENERGY
Although December’s COP28 didn’t explicitly endorse a “phase out” of coal, oil, and gas as many hoped, it did address the concept of “transitioning away” from fossil fuels in power systems. According to Anisa Kamadoli Costa, chief sustainability officer at Rivian, this year will be critical in the continued transition to renewable energy: “I can’t help but see 2024 as a critical year in the transformation of our transportation and energy system from internal combustion engines powered by fossil fuels to electric vehicles powered increasingly by renewable energy. Critical because the pace of this shift needs to accelerate significantly across three levers simultaneously, as laid out in The Pathway Report, which we commissioned together with Polestar: faster electrification; more renewable energy for charging; and decarbonizing our supply chains. We need to move further faster in transitioning away from fossil fuels and I hope that 2024 will be a year of action on this front—it needs to be.”

BE PREPARED TO SHIFT CORPORATE RESPONSIBILITY STRATEGIES QUICKLY, AND IN REAL-TIME
Kristen Titus, founder and CEO of Titus Group, believes that corporate responsibility strategies will continue to evolve in 2024, often shifting in real time given the various issues businesses navigate daily. She shared: “The next 12 months promise to challenge the standards and norms that have guided corporate responsibility efforts over the past decade. Corporations and executives are facing consequential decisions as they navigate economic uncertainties, global conflict, and the impacts of AI on society—all this in a year in which two billion people across more than 40 countries will be headed to the polls. We’re seeing strategies shift in real time, with the public’s trust in executives waning. Expect renewed calls for commitments to economic mobility, responsible AI, education and workforce investments, and time off to vote. Perhaps most notably, AI will be top of mind—for executives, policymakers, for voters and consumers alike.”

In closing, expect much more change ahead. Navigating 2024 will require transparency in addition to swift and adaptive corporate responsibility strategies. By putting employees and workers first, companies can not only navigate the evolving landscape but also lead in making a positive impact across community well-being, climate change, democracy, and much more that we all need during these challenging times.

A refreshed look at leadership from the desk of CEO and chief content officer Stephanie Mehta


ABOUT THE AUTHOR
Susan McPherson is a serial connector, angel investor, and corporate responsibility expert. She is the founder and CEO of McPherson Strategies, a B-Corp certified, communications consultancy focused on the intersection of brands and social impact