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ESG Reporting: What are the Social Factors?

In this third instalment of our five-part series on ESG reporting, we explore the social aspects of ESG that are relevant to recruitment businesses.

Marie
03/01/2023

The drive towards a low-carbon economy has rightly seen companies focusing on the environmental side of ESG reporting. While this is encouraging, the general consensus is that more also needs to be done by businesses in all sectors to assess the risks and opportunities in social matters. Therefore, in this third instalment of our five-part series on ESG reporting, we’re going to focus on the social elements of ESG that recruitment companies should be aware of.

What’s covered under the Social heading of ESG?

In a nutshell, the social factors include how a company interacts with its employees, customers (candidates and end clients), suppliers and the overall community that it operates within. It’s a combination of social and human capital, and some social areas that companies should focus on are:

Employee, Supplier & Customer Relations:


Even without ESG, ensuring that your company has a positive relationship with employees, suppliers and customers is pertinent to your business productivity and service. However, a practical thing that you can track for each of these within your social circle are:

  • Employee engagement surveys: may feel that your employees are happy and engaged, but an anonymous engagement survey will not just help you gauge this but you may also find that you get very useful feedback on areas your business can improve. A happier workforce is then likely to be a more productive one.
  • Customer satisfaction surveys: likewise to the above, sending a survey to your clients and candidates such as an NPS (Net Promotor Score) survey will help you gauge whether your clients and candidates are happy with your services. A NPS is beneficial too as you can compare to industry averages and track this over time.
  • Due diligence checks on umbrella companies: if you work with umbrella companies then how they treat your candidates reflects strongly on your brand. Carry out regular due diligence checks to ensure the umbrella companies you are working with are not only compliant but treat your candidates well.
  • Timely payment of suppliers: whilst many larger businesses may take this for granted, many smaller businesses can run into huge cash flow issues if they’re not paid for invoices within the agreed terms, paying these invoices on time can help them and help your supplier relations.

Diversity & Inclusion:

One key point under the social heading is to ensure that your company promotes diversity and inclusion in its workforce. This can be done by ensuring that there’s no discrimination in hiring strategies and through promoting equality and inclusion in internal policies. A white paper by Robert Half found that whilst 45% of employers do not monitor employee diversity, 73% say that diversity encourages creative and innovative thinking and 51% believe that diversity helps introduce unique skills into the workforce. This is also very important at board level, which we’ll cover in our next article on governance.

Furthermore, as recruitment consultants, you have a duty of care to educate your clients on how they can improve their hiring strategies.

Community Relations

One large stakeholder that shouldn’t be ignored when it comes to the social heading is the community in which the business operates. Many businesses have been getting involved in their own communities and local projects or supporting charities or disadvantaged communities and projects.


Whilst many companies are rightly praised for their social and charitable efforts, it should be noted that social justice is another area that can attract scrutiny. From anti-slavery to LGBTQ rights, there have been a string of campaigns filling the news headlines. Many businesses have been quick to jump on these trends by using the appropriate hashtags and flags. Sometimes these practices can come across as cynical if you get them wrong and it can lead to accusations of ‘pinkwashing’ or ‘colourwashing’, for example.

Other social factors:

However, there’s plenty more that comes under the social heading, such as:

  • Health and safety
  • Internal training to support employee wellbeing
  • Supporting labour rights
  • Data protection and security

With the social aspect of ESG reporting, you’ll need to take a holistic view and look at a range of these factors that influence your overall social standing.

Read our next article…

In the fourth article in this series, we take a detailed look at the governance side of ESG reporting.

Need advice?

If you own a recruitment business and are seeking support about ESG reporting, call our friendly experts on 0845 606 9632 or email hello@recruitmentaccountants.com.

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