A new report on the "S" of ESG finds that Innovators are helping
clients confront the complexities of ESG in business, helping
address risk while also supporting fundamental value creation and
long-term business strategy
NEW
YORK, July 11, 2024 /PRNewswire/ -- A new report
from Law.com Compass Pacesetter Research (previously known as ALM
Intelligence Pacesetter Research) has found that the "S" in ESG is
a complex evolving terrain filled with differences in definition,
measurement, and approaches but which is complicated by the
additional layers of growing stakeholder pressure for
accountability, rising stakeholder activism and regulations, the
politicization of ESG, and differing regions perspectives, to name
a few. While under pressure to incorporate ESG (S) principles into
their business strategies, business leaders are confounded by
unclear ESG definitions and goals, by insufficient data tracking,
and by the sheer difficulty of achieving hard ROIs for ESG-related
investments. An added wrinkle is that while most organizations are
on some sort of ESG journey, their differing levels of ESG maturity
make complying with ESG information requests at RFPs or vendor
negotiations all the more difficult.
"At its core, the "S" is about people, and
its subjective nature renders a one-size-fits-all approach
ineffective, creating a need to develop customized frameworks that
align with the organization's business strategy." said Ruth Sierra, Analyst, Law.com Compass Pacesetter
Research.
In response to this challenge, Innovators among professional
services providers have approaches that span targeted business unit
services all the way up to full-blown integrated, comprehensive,
business strategy redesign. Innovators among professional service
providers are driving conversations linking ESG to risk management
and the optimization of business performance, optimal outcomes,
and, ultimately, sustainable growth.
"At its core, the "S" is about people, and its subjective nature
renders a one-size-fits-all approach ineffective, creating a need
to develop customized frameworks that align with the organization's
business strategy but also address the varied, and often
conflicting, perspectives across stakeholders," said Ruth Sierra, Analyst, Law.com Compass Pacesetter
Research.
Key trends identified in this research include:
-The increase in regulations in human rights, modern slavery,
supply chain, Indigenous populations, and employment laws have
caused many business leaders to begin addressing the "S" from a
regulatory compliance perspective
-The "S" faces a number of challenges (e.g. lack of data,
standardization in definition, measurement criteria, and reporting
disclosure, diverse stakeholder perspectives, and differing
regional perspectives on "S" issues, etc.), making ESG a cumbersome
initiative for business leaders to invest in with an uncertain ROI,
causing ESG to be seen as a cost, and of lesser priority, for some
organizations
-With the "S" covering so many factors, both external and
internal (e.g. diversity, equity, and inclusion (DE&I),
employee engagement, community engagement, consumer protection,
etc.), this has caused organizations and investors to each define
and measure "S" factors differently creating a lack of cohesiveness
in the data, driving skepticism of real business impact
-The lack of data available on ESG (social) issues has become
the primary impediment to ESG initiatives, and Innovators among
professional service providers are helping clients source and
identify KPIs while collecting, structuring, normalizing, and
centralizing social-related data to better position clients to
manage long-term goals and realize the full business benefits
-Innovative professional service providers have moved beyond the
one-size-fits-all approach and recognized effective "S" frameworks
require a customized approach that aligns with the unique business
goals of each client
-Increasingly AI is being used in areas such as DE&I to help
reach diversity workforce goals through bias detection
improvements, including identifying discrimination patterns in
hiring to performance management, compensation, termination,
etc.
In this three-part Law.com Compass Pacesetter Research series on
ESG, our second report is on the "S": Social. The Pacesetter
Advisory Council assessed dozens of providers to arrive at twenty
Innovators recognized for their ability to help clients navigate an
increasingly complex market environment. The research and analysis
also provide insights into the competitive dynamics and service
delivery trends driving convergence across legal, management
consulting, multi-service, communication/PR, and recruitment
firms.
In this report, Law.com Compass Pacesetter Research evaluates
the innovation in ESG: Social capabilities and offerings of the
following providers: APCO Worldwide, Baker McKenzie, Boston
Consulting Group, Brunswick Group, Clifford
Chance, Deloitte, DWF, EY, FTI Consulting, Insight Global,
Korn Ferry, KPMG, Odgers Berndtson, Orrick, Herrington &
Sutcliffe, Paul Weiss, PwC, Ropes
& Gray, Russell Reynolds Associates, Teneo, WTW.
Law.com Compass Pacesetter Research provides independent,
objective research to providers and buyers of professional services
and practical insights that inform decision-making processes.
To learn more about the research or to obtain the full version
of the ESG: Social 2024 report, go to:
http://www.law.com/lawcom-compass/pacesetter-research.
About ALM
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company supporting the practice of and business of professionals in
the legal, insurance, commercial real estate, and financial
services industries. ALM delivers leading data, intelligence,
insights, events, and audiences essential for growing businesses
globally to over 7 million professionals. Please visit alm.com for
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@ALMGlobal_.
Media Contact
Eliza Sawyer, ALM, 2124577919,
esawyer@alm.com, www.alm.com
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