We know the ‘S’ in ESG has been living in the shadow of ‘E’. However, business leaders are increasingly realising that Aotearoa New Zealand’s biggest societal and environmental challenges cannot be solved if people aren’t thriving. An integrated approach is needed, and I see social impact and responsibility taking centre stage this year, with more and more businesses (both individually and collectively) actively working with communities and making greater commitments to prioritise, measure, and improve wellbeing, equity and livability.
The new year is a great time to press pause, reflect and look ahead – so let me share my top four social sustainability trends to watch out for in 2024.
1. Supply chain due diligence will drive improved transparency and social impact
Increasing resilience in supply chains is coming to the fore as companies are becoming much more aware of the climate change-related physical risks for their business.
Many companies are working to be more transparent about the environmental and social impacts throughout their supply chains. However, making meaningful changes is challenging, and these efforts face growing scrutiny amidst the risks of being accused of green and blue washing claims.
Regulators and investors will continue to place increasing demands on companies to enhance their understanding of suppliers from the start of the supply chain by digitally tracing the path from the source (e.g. farm or mine) through multiple supplier tiers. Achieving this will require unprecedented collaboration throughout supply chains, marking a new era in digitalisation, transparency, and traceability.
Alongside climate reporting, nature-based disclosures have climbed up the corporate agenda – I see social-related risk and human rights due diligence as the next frontier. We’re seeing growing regulation overseas led by the EU, and with New Zealand’s Modern slavery legislation expected shortly and TSFD due in 2025, SBC members need to prepare for mandatory social-related risk reporting now – and importantly, ensure they don’t just report for the sake of it, but use reporting to aid better decision-making and bring about actual change. Risk-based due diligence will be key. This will be the focus for the Thriving People programme in March!
2. Making a difference together will become more common
Greater societal impact lies in collaboration and partnerships because it promotes idea exchange, allows for the pooling of diverse skills and resources, and fosters innovation.
When businesses, NGOs, governments and communities work together, they can address complex challenges more effectively, share knowledge, and leverage combined resources to create positive change.
That’s why I believe 2024 will see unprecedented levels of collaboration, public-private partnerships, and community-led place-based initiatives that can help contribute to the solving of some of our country’s greatest societal issues such as housing affordability, education achievement and inequality. However, co-opetition will be a critical enabler.
3. The focus on people’s sustainability and societal wellbeing is growing
People coming to work today have different needs and expectations, highlighting the need for more humanised, diverse, and inclusive workplaces, where workers seek purpose and belonging, not just salary.
Recent research coming out of the Harvard Business Review suggests more than 90% of employees are willing to trade a percentage of their earnings for greater meaning at work. While the cost of living crisis may call that into question, businesses need to innovate to retain market-share, inspiring a shift from an internal focus on ‘what we think customers want’ to an external, customer-centric and community-minded model.
A critical trend in leadership in 2024 will also see the heightened focus on managing not only one’s own mental wellbeing, but also that of team members.
There seems no end to the challenges being thrown at us, our whānau and local communities. Workplaces are no different, where both business leaders and frontline staff alike are navigating a complex array of issues and competing pressures at a growing pace that can significantly impact mental wellbeing.
The good news is employers are taking action. BusinessNZ’s 2023 workplace wellness report showed growing concern and support for employee wellbeing across the business community. Herein lies an opportunity to step back and see how we can humanise work.
With the average person spending one-third of their lifetime (roughly 90,000 hours) at work, creating practices that help employees thrive is critical. This must go beyond a recognition that the mental wellbeing is crucial for effective, enduring leadership. To quote Leanne Holdsworth, there is a need to develop work and workplaces that support “everyone to be at their best, whatever that means to them, for the benefits of every aspect of their lives”. Integrating mental health strategies into leadership practices will be essential.
Check out Leanne’s book Human Work: Five Leadership Mindsets for Humanising the Workplace if you would like to know more.
4. Leadership development will tie more closely to societal impact
Progress in achieving the UN Sustainable Development Goals (SDGs) has been slow – New Zealand’s first progress report provides a stark reminder.
However, the collective struggle to navigate the complexities of interconnected societal issues may be helped by the ‘Inner Development Goals‘ (IDGs) initiative. Positioned at the juncture of personal and societal progress, IDGs aim to build the capacity and capabilities of individuals to meaningfully contribute to the SDGs.
Global corporate leaders such as IKEA and Google are actively embracing IDGs. These companies are tying their corporate leadership development programs to societal impact, as outlined by the SDGs, recognising that the growth of their leaders should align with broader global objectives. The IDGs’ five pillars (Being, Thinking, Relating, Collaborating, and Acting) provide a holistic framework that encourages personal growth, and by extension brings positive change in the broader societal context.
As companies integrate IDGs into executive learning and leadership development, these capabilities can spur meaningful action that supports a better, more sustainable future where business, people and the environment can thrive together.
Next steps – get involved
SBC’s flagship ‘Strengthening the ‘S’ in ESG’ report highlights the opportunity for businesses to improve social equity by prioritising people. In 2024, we’re stepping up phased implementation of the report’s recommendations, starting with a focus on community investment (Priority 1). You can register for our upcoming Thriving Voices webinar on impact measurement on 13 February here.
In March, we begin implementing the report’s supply chain recommendations (Priority 2). This includes strengthening SBC members’ end-to-end approach, practicing human rights due diligence, and adapting to regulatory shifts, notably Modern Slavery.
I’m organising a workshop in February to develop a shared action agenda for Priority 2. If you’re interested in participating or want more details on the workshop’s aims, outcomes, and your organisation’s potential role, please contact me at [email protected].