From a corporate perspective, social governance is fast catching up with environmental compliance in terms of importance, a new report from global intelligence and cyber security firm S-RM has found.
According to S-RM’s latest ESG Report 2024, corporate concerns are increasingly shifting towards human rights and modern slavery, EDI (equality, diversity and inclusion) and community programmes, as firms re-evaluate their ESG priorities.
Tackling modern slavery
Nearly a quarter (23%) of corporations have identified ‘domestic modern slavery laws’ as their foremost regulatory concern, compared to 15% prioritising the CSRD (Corporate Sustainability Reporting Directive).
Elsewhere, just 13% of corporate respondents considered the recently-passed Corporate Sustainability Due Diligence Directive (CSDDD) as the most important regulation for them to consider, S-RM added, suggesting that many firms may be caught out as the EU progresses its ESG agenda in coming years.
Read more: Corporate boards need to ‘challenge’ management into incorporating sustainability: EY
Knowledge gap
Around a quarter of both investors (24%) and corporates (26%) said that they lack awareness of social issues or challenges within their industry, underscoring a critical knowledge gap when it comes to ESG delivery.
However, despite this gap, some 66% of companies expect their ESG budgets to rise within the next five years, with a substantial allocation earmarked for addressing social concerns.
“Our survey has highlighted the widespread lack of confidence that the Social pillar of ESG is being sufficiently tended to, with risks mitigated and value exploited across both investor and corporate groups,” commented Natalie Stafford, director and head of ESG at S-RM.
“There is a clear consensus that Social risks are rising up the corporate and investor agendas, driven by a combination of employee retention, shareholder pressure, board instruction, regulation and legislation, and consumer and client demand.”
Stafford added that the findings underscore the continued prominence of ESG on corporate agendas, with increased budgets being allocated for the purpose of addressing social issues in the next five years.
You can read the full report here.
