Of course, social risks and their potential financial impact vary from industry to industry. Others, such as the gap in compensation between male and female employees or the percentage of racially diverse workers, are measured quantitatively. Some risks are evaluated with qualitative questions, for example whether and to what degree a company tracks human rights abuses in its supply chain.

HOW IS IT MEASURED?Īs with most ESG metrics, investors and independent ratings providers typically assess social factors based on the financial risks and opportunities they pose to a company. Issues affecting staff could include the company's health and safety track record, its policy on diversity, equity and inclusion (DEI), and its labor relations between management and workers.Įxternal issues that fall under the broad umbrella term could include the company's relationship with local community leaders, whether its suppliers use forced or child labor, and product safety. The social component of ESG covers all the ways companies interact with their employees and the communities in which they operate. Yet more than half of global institutional investors surveyed by French bank BNP Paribas last year said social issues were the most difficult to assess and integrate into their investment analysis. NEW YORK, July 19 (Reuters) - The 'S' in environmental, social and governance (ESG) investing moved into the spotlight during the COVID-19 pandemic as companies faced concerns about employee wellbeing and bold calls for action on social inequality.

What is meaning of s