Social sustainability is the arm of sustainability which relates to the positive and negative impacts of business on people.

It encompasses topics such as social equity, liveability, community, human rights, cultural competence, labour rights, social justice and social responsibility. Issues of social sustainability have typically received less attention in corporate discourse than those relevant to economic and environmental sustainability.

What is social sustainability?

Social sustainability is interconnected with the other areas of sustainability mentioned above and cannot truly be isolated from them. Some approaches to sustainability even suggest that all aspects of sustainability are social at their root. Organisations which include social sustainability measures as part of their performance measures will often also include economic and environmental sustainability reports.

The social impact of an entity’s operations are not always easily quantifiable – however, they are simple to identify.

What issues does social sustainability include?

For corporations, social sustainability reporting can help performance in terms of its corporate social responsibility. By incorporating social sustainability goals and reports into company policies, organisations can improve their understanding of their impact on society. Some issues that may be considered under an organisation's sustainability policy include:

  • Living conditions of the workforce and the local community;

  • Workforce practices;

  • Health and safety;

  • Diversity;

  • Work-life balance;

  • Shareholder engagement;

  • Impact on and engagement with the community;

  • Modern slavery in supply chains;

  • Philanthropy; and

  • Volunteering initiatives.

Social sustainability and investment

There is a trend across markets that show investors are increasingly searching for opportunities that create a positive social and environmental impact in addition to a strong financial return. This new demand is due to consumers and investors becoming more engaged in sustainability concerns. There is a desire to contribute to ethically made and resourced services and products.

Entities which recognise the importance of social sustainability are also acknowledging the importance of their corporate social responsibility, which is a favourable factor in an entity’s reputation and brand. By this token, a lack of understanding of this interconnectedness between an organisation and its surroundings poses a risk to brand, to its governance and in some cases to product and service quality.

Social sustainability and performance

Social sustainability metrics, compared to traditional accounting standards, are amorphous and complex. It can be difficult to align social sustainability measurements with company strategy.

However, traditional accounting standards are being rethought. Events such as the Global Financial Crisis and the banking Royal Commission in Australia have brought increased focus on the role of governance and the responsibilities of companies to their environmental and social surroundings. Rather than continuing to prioritise the easy wins of short-term performance, business leaders are looking at ways of lengthening of corporate field of vision.

The movement of using such frameworks as the ‘triple bottom line’, or environmental, social and governance (ESG) criteria, in corporate decision making has more momentum than ever. This is a cluster of non-financial considerations which are used in evaluating investments, equity and performance.

The UN Global Compact, a voluntary initiative based on CEO commitments to implement sustainability principles, posits that including social sustainability considerations in decision making can have an array of positive consequences for businesses, such as:

  • Accessing new markets;

  • Reducing staff turnover/increased employee engagement;

  • Increased innovation; and

  • Lowers risk.

Our online bookstore is a great place to find out more about ethics, leadership and the role of a director. Find out more about a board’s role in driving organisational performance while contributing to social sustainability in Creating Value: A practical guide for boards and directors by David Walters and Mark Rainbird MAICD.

AICD’s contribution to social sustainability

The AICD is committed to contributing to the United Nations Sustainable Development Goals, with particular focus on the Goal 16, which is to promote peace, justice and strong institutions. Our vision is to strengthen society through world-class governance. Our contribution to Goal 16 is achieved through development and delivery of education programs within the Asia-Pacific region.

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