The “S” in ESG, social sustainability is an often overlooked aspect of sustainability, as sustainable development discussions often focus on environmental, economic, and climate-related topics. All three dimensions of ESG–environmental, social, and governance–are important elements of sustainable development and should be addressed on an international scale.

The following three definitions of social sustainability paint a broad picture of the topic and together emphasize how key equity, diversity, and wellbeing are to supporting thriving, sustainable communities:

• Social sustainability occurs when the formal and informal processes; systems; structures; and relationships actively support the capacity of current and future generations to create healthy and livable communities. Socially sustainable communities are equitable, diverse, connected and democratic and provide a good quality of life. (Source: WACOSS, Western Australia Council of Social Services)
• Social sustainability is a process for creating sustainable successful places that promote wellbeing, by understanding what people need from the places they live and work. Social sustainability combines design of the physical realm with design of the social world – infrastructure to support social and cultural life, social amenities, systems for citizen engagement, and space for people and places to evolve. (Source: Social Life, a UK based social enterprise specializing in place based innovation)
• The ability of a community to develop processes and structures which not only meet the needs of its current members but also support the ability of future generations to maintain a healthy community. (Source: Business Dictionary)

Social sustainability in business

From a business perspective, social sustainability is about understanding the impacts of corporations on people and society. In the triple bottom line (TBL) model, social sustainability is the least quantifiable part of sustainability. The TBL is an accounting framework of three parts: social, environmental and financial. The TBL framework has been adopted by organizations to evaluate performance. The three aspects interrelate to determine a corporation’s performance.

In corporations, social sustainability performance issues include human rights, fair labor practices, living conditions, health, safety, wellness, diversity, equity, work-life balance, empowerment, community engagement, philanthropy, volunteerism, and more. Though social impact, or social sustainability, issues are not easily quantifiable or measurable, they are easier to identify. Although measuring social impact can present unique challenges, best practices such as engaging a variety of stakeholders and mapping impact pathways can help companies more accurately assess their social performance.

Adrian Henriques, Professor of Accountability and CSR at Middlesex University and author of ‘Corporate Impact – Measuring and Managing your Social Footprint,’ states, “Social impact includes anything that affects company-stakeholder relationships: from how much and how reliably suppliers are paid, to how a product affects lives. From how small shareholders may be treated to the impact of alcohol on health and communities.”

According to the UN Global Compact, social sustainability should be a critical part of any business because it affects the quality of a business’ relationships with stakeholders. Social sustainability is a proactive way of managing and identifying business impacts on employees, workers in the value chain, customers, and local communities.

Companies that raise the importance of social sustainability recognize the significance of their relationships with people, communities and society. Social responsibility becomes part of their core business strategy and they consider how their activities affect people. There is a human cost to doing business. A socially sustainable business will consider the safety of its workers in a particular location. It will not allow its workers’ safety to be compromised by forcing them to work in a building that has been deemed unsafe.

Social sustainability mitigates risk. Poor social sustainability is a risk to both brand and product quality. Outsourcing to manufacturing sites with unsafe or poor working conditions can hurt a global corporation’s brand if a disaster happened or if word were to reach media and consumers. Similarly, ignoring safety measures to protect public health can cost food manufacturers millions of dollars through government-backed recalls of products from market shelves.

Providing safer working conditions, living wages and job security creates a more secure supply chain.

Consumers want socially sustainable products. Consumers are more informed and engaged. They care about the impact (environmental or social) of the products they buy. Companies who are more transparent about their supply chains have reaped the benefits from consumers who are willing to spend more for products that are more ethical.

Social sustainability is attainable. Companies are now partnering with social sustainability organizations to become more transparent, make their operations or supply chains more ethical, and understand the human cost of business.

According to the UN Global Compact, aiming for social sustainability can help businesses in a number of ways:

• Unlocking new markets
• Helping retain and attract business partners
• Becoming the source of innovation for new product or service lines
• Raising internal morale and employee engagement
• Improving risk management
• Improving company-community conflicts

Social sustainability dimensions and issues

According to Nobel Laureate Amartya Sen, social sustainability has five dimensions. These are factors to be considered in determining if a business or a project is socially sustainable:

Equity

• Will the project reduce disadvantage for the target group?
• Will it assist the target group to have more control over their lives, socially and economically?
• Will it identify the causes of disadvantage and inequality and look for ways to reduce them?
• Will it identify and aim to meet the needs of any particularly disadvantaged and marginalized people within the target group?
• Will it be delivered without bias and promote fairness?

Diversity

• Will the project identify diverse groups within the target group and look at ways to meet their particular needs?
• Will it recognize diversity within cultural, ethnic and racial groups?
• Will it allow for diverse viewpoints, beliefs and values to be taken into consideration?
• Will it promote understanding and acceptance within the broader community of diverse backgrounds, cultures and life circumstances?

Social cohesion

• Will the project help the target group develop a sense of belonging in the broader community?
• Will it increase participation in social activities by individuals in the target group?
• Will it improve the target groups’ understanding of and access to public and civic institutions?
• Will it build links between the target group and other groups in the broader community?
• Will it result in the provision of increased support to the target group by the broader community?
• Will it encourage the target group to contribute towards the community or provide support for others

Quality of life

• Will the project improve affordable and appropriate housing opportunities for the target group?
• Will it improve physical health outcomes for the target group?
• Will it improve mental health outcomes for the target group?
• Will it improve education, training and skill development opportunities for the target group?
• Will it improve employment opportunities for the target group?
• Will the project improve access to transport for the target group?
• Will it improve the ability of the target group to meet their basic needs?
• Will it improve the safety and security for the target group?
• Will it improve access to community amenities and facilities for the target group?

Democracy and governance

• Will the project allow for a diverse range of people (especially the target group) to participate and be represented in decision-making processes?
• Will the processes of decision-making for the project be clear to and easily understood by staff and stakeholders?
• Will it have a budget sufficient to ensure adequate delivery by qualified trained staff?
• Will it ensure that the use of volunteers is appropriate and properly governed?
• Will the duration of the project be sufficient to achieve the desired outcomes?
• Have you considered what will happen when the project ceases?

The UN Global Compact cites human rights as the cornerstone of social sustainability. This extends to areas such as human rights of specific groups.

• Human rights
• Labor
• Gender equality
• Children
• Indigenous peoples
• Education

Social sustainability is a worthy business investment. When workers are paid fairly and work under safe working conditions, they are healthier and more productive. Healthier and more productive workers then translate to more profits for companies. Furthermore, socially sustainable companies enjoy greater consumer patronage, as consumers tend to support businesses that treat their workers fairly.

ADEC ESG Solutions is a leader in sustainability solutions, supporting global organizations as they work to integrate environmental, social, and governance topics into successful and impactful corporate strategy. You can read more about how to measure your company’s social impact on our blog. Talk to us today to learn more about how we can help you manage social data, engage stakeholders, and plan around your sustainability goals.