Having an accurate picture of an organisation’s activity in the social sphere is a critical step in creating a comprehensive and effective social strategy.
4. Choosing the right initiatives
One of the most widely used and helpful guides to creating a social agenda is the UN’s Sustainable Development Goals — 17 objectives with accompanying actions that can help companies navigate the maze of social impact.
These range from topics such as good health and wellbeing to sustainable cities and communities, to responsible consumption and production.
However, economic development — something that should be a core element of the financial services industry’s contribution to social impact — is only addressed by 4 per cent of companies in the industry.
Companies need to grow their social impact by playing to their strengths, and focusing on areas in which they can have the greatest social return on investment.
Some good examples include:
- growth in lending portfolios funding ESG investments
- community development and financing initiatives
- carbon finance and emissions trading
- championing financial inclusion
- financial wellbeing education
Time for change is now
By embracing a holistic ESG approach, collaborating with external partners, and investing as much in the “S” as the “E” of ESG, financial services will make strides towards becoming a socially mature industry, and improve its impact on society over the short and long term.
Achieving this will mean embedding social responsibility as a key part of business strategy.
The time is ripe for financial institutions to move beyond profit-driven models and align themselves with the broader societal goals of sustainability, inclusivity and positive social change.
Daniela Chikova and Beth Bovis are partners at management consulting firm Kearney
