Social
This pillar addresses how a business impacts society and how it manages relationships with employees, customers or clients, its communities and others. This could include diversity and inclusion; labour practices and human rights; health and safety; employee, customer and community engagement; charitable/philanthropic commitments; supply chain practices and more. Increasingly market forces are moving towards businesses articulating a compelling social purpose, and doing so in a way that creates value not just for the business and customers but for the broader community or society itself.
Why it matters
Positive brand and organizational reputation, risk reduction, attracting capital, and fostering positive relationships with stakeholders all contribute to long-term sustainability for a company. A commitment to social responsibility better positions a business to thrive in a changing environment and to meet increasing demands for ethical and sustainable practices in business.
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Governance
This area focuses on the systems and structures that a business has in place to ensure ethical behaviour, transparency and accountability. This might include shareholder rights, executive compensation, anti-corruption and bribery policies, risk management, ethical business practices, cybersecurity and compliance with laws and regulations.
Why it matters
Trust building with employees, investors, the community and others contributes to the overall sustainability, stability and ethical behaviour of a business. Businesses with strong governance are better positioned to navigate challenges, build positive relationships, and create organizational value over the long term.
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