Introduction

When travelling in China a couple of months ago, I noticed a different focus when it came to ESG. More of a focus on the social aspects of ESG. As a country that has lifted over 800 million people out of poverty, and one that has a vast human capital base, it’s logical that the social dimension of ESG features strongly in their priorities. Yet, when I speak to those in the industry here, there is so much more focus on the environment, carbon especially. Everybody loves to talk about carbon.

But, it got me reflecting on the need to share the Social Sustainability aspects that companies need to consider. What were previously social issues, relegated to niche corporate social responsibility (CSR) departments, are now a mainstream, material concern demanding strategic oversight from SVPs and Senior Directors.

Social sustainability represents a commitment to conducting business in a manner that creates positive outcomes for all stakeholders: employees, customers, suppliers, and communities. Ignoring this leads to a strategic liability for organizations.

This article outlines the necessity of integrating social sustainability into the corporate strategy, and focusing on the fundamental pillars required to measure, report, and build a resilient, socially responsible organization.

Embedding Social Sustainability at a Strategic Level

To effectively build social sustainability, executive leaders must first shift the organizational mindset from defensive compliance to proactive value creation. This necessitates moving beyond the sole focus of profit to embrace a wider view of value that encompasses societal well-being.

A critical first step in this strategic integration involves the robust measuring and reporting of social performance. We’ve all heard “what cannot be measured cannot be managed”, noting that transparent reporting also signals genuine commitment to stakeholders and investors.

The strategic foundation for this work is provided by the United Nations Guiding Principles on Business and Human Rights (UNGPs). These principles establish a global framework, providing clear expectations for organizations regarding their responsibility to respect and promote human rights across their operations and supply chains. Strategically, this means establishing policies and procedures that ensure the organization is not causing or contributing to adverse human rights impacts and that it actively works to address such impacts when they occur. This commitment must be systemic, touching every facet of the business, from employment practices to the sourcing of natural resources and interactions with local communities.

Strategic Pillar 1: Operationalizing Human Rights Due Diligence

For executives, it’s worth recognizing that the commitment to human rights must be operationalized through a robust program of Human Rights Due Diligence (HRDD). HRDD is a cornerstone of a sustainable social strategy, moving beyond passive statements to active, ongoing risk management.

HRDD requires four critical strategic actions:

Impact Identification and Assessment: Organizations must conduct regular, thorough assessments to identify and assess potential and actual human rights impacts. This process is vital for prioritizing risks and understanding vulnerabilities across the entire value chain. Examples of critical human rights issues include forced labor, child labor, discrimination, freedom of association, and the rights of indigenous peoples.
Strategy Development and Mitigation: Based on the assessments, the executive team must develop specific strategies and action plans to prevent or mitigate adverse impacts. This involves allocating appropriate resources and setting clear, measurable targets for improvement.
Policy Adoption and Training: The strategic commitment must be formalized through the adoption of specific policies and procedures. Furthermore, providing comprehensive training and awareness-raising programs to employees, managers, and key partners is essential to embed these standards into the organizational culture and daily operations.
Establishing Grievance Mechanisms: A key element of strategic accountability is the ability to address concerns. Organizations must establish effective grievance mechanisms to enable employees, community members, and other stakeholders to submit complaints and seek redress. This signals trust and facilitates early intervention before issues escalate.

Beyond the formal mechanisms, this pillar also mandates the promotion of fair legal practices, diversity, inclusion, and community engagement as non-negotiable elements of organizational ethos.

Strategic Pillar 2: Fair and Equitable Labor Practices

Labor practices represent a central, high-visibility component of social sustainability. Executives must ensure that employment practices are fair, equitable, and compliant with both local legal requirements and overarching international standards / bodies. This responsibility extends to all workers, including those in the supply chain.

The strategic focus points for labor practices include:

Remuneration and Benefits: Establishing policies that ensure fair remuneration and appropriate benefits, going beyond minimum legal requirements to ensure a decent standard of living.
Working Conditions and Hours: Maintaining safe and healthy working environments and adhering to reasonable limits on working hours.
Health, Safety, and Well-being: Labor practices are inextricably linked to organizational health and safety. Organizations must actively invest in systems and committees to promote and support worker health, safety, and mental health. This requires training programs and clear policies supporting work-life balance.
Collective Bargaining: Respecting the fundamental right to collective bargaining and freedom of association.
Addressing Precarious Work: Executive leadership must confront the growing concern about the prevalence of precarious work, such as temporary, part-time, and contract work, which can lead to insecurity and vulnerability for workers. A strategic commitment involves seeking to provide decent work opportunities that offer stability, security, and clear pathways for advancement. This mitigates reputational and operational risk associated with an insecure workforce.

Strategic Pillar 3: Integrating Legal Practices and Ethical Governance

To address legal practices strategically, organizations must adopt policies and procedures that ensure the fair and equitable treatment of workers. This involves creating a governance structure that champions ethical conduct and legal compliance not as separate activities, but as an integral part of operations.

This strategic pillar requires the following executive actions:

Policy and Procedure Implementation: Systematically adopting policies and procedures that guarantee fair treatment and uphold legal obligations across all jurisdictions of operation.
Worker Well-being and Mental Health: Going beyond physical safety to provide training and development opportunities, establish health and safety committees, and implement programs designed to support work-life balance and mental health. This strategic focus is an investment in human capital that drives productivity and retention.
Continuous Improvement: Treating social sustainability metrics and reporting not as a static compliance function, but as an input for continuous improvement. Legal and ethical adherence should be consistently monitored against evolving international and national standards.

Conclusion

For companies doing social sustainability right, it’s not an optional add-on or a philanthropic pursuit; it fits into their strategic pursuit to be an company of choice, seeking resilience, long-term value, and societal legitimacy.

By systematically implementing Human Rights Due Diligence, ensuring fair and secure labor practices, and embedding legal and ethical governance into core strategy, executive leadership can transform social responsibility from a risk factor into a competitive advantage.

The days when maximizing profit was the sole focus are over; the future belongs to organizations that proactively create positive outcomes for all stakeholders to uphold a strong societal reputation. And this commitment will need a clear vision, dedicated resources, and decisive action from the highest levels of management to ensure the organization not only succeeds financially but also makes a measurable, positive impact on society.

Operationalizing Social Sustainability for Reputational Success