For years, the “E” in ESG has dominated the conversation. Carbon, climate, and energy metrics are now relatively mature. By contrast, the “S” – human rights, diversity, equity & inclusion (DEI), and community impact – remains underdeveloped, underreported, and often misunderstood.
That is changing fast. Stakeholders no longer accept generic statements about “people” and “community.” They expect evidence: consistent data, credible narratives, and clear links to risk, value, and strategy.
This is where social metrics move from “soft” to strategically material.
Why the Social Factor Matters Right Now
Several converging trends are pushing companies in the US, UK, India, and beyond to strengthen their social reporting:
- Regulatory expectations are rising. ESRS, GRI, and emerging due diligence regulations are sharpening focus on human rights, supply chains, and workers. IFRS S1 directs companies to report material sustainability-related risks and opportunities – social risks are firmly in scope.
- Investors are quantifying “S” risk. Labour disputes, discrimination lawsuits, unsafe working conditions, or community opposition can erode value as quickly as climate risk.
- Workforce expectations have shifted. Talent wants to work for organisations that walk the talk on DEI, psychological safety, fair pay, and community impact.
- Communities are more vocal. Social media, local activism, and media scrutiny can rapidly amplify social harm – or highlight meaningful positive impact.
In short: social performance is now a business resilience issue, not just a CSR theme. But it’s harder to measure and standardise than emissions or energy use.
Why Measuring Social Performance Is So Challenging
Sustainability, finance, and compliance leaders typically face similar obstacles:
- Fragmented data ownership
HR holds DEI and workforce data, Legal manages human rights incidents, Procurement tracks supplier performance, CSR teams manage community programmes. None of this is naturally connected. - Mix of qualitative and quantitative data
Surveys, grievance logs, risk assessments, audit reports, policies, engagement stories – they don’t fit neatly into a single spreadsheet. - Inconsistent definitions and boundaries
What exactly counts as a “human rights incident”? How do you define “diverse leadership”? Which community initiatives are strategic vs philanthropic? - Multi-framework complexity
ESRS social standards, GRI’s series on labour/human rights/community, local governance codes, and voluntary benchmarks all pull from the same underlying story but require different cuts of the data. - Audit readiness and assurance pressure
As more ESG reports move towards assurance, social data needs controls, traceability, and documentation comparable to financial information.
The result? High effort, low confidence. Teams spend more time chasing inputs than extracting insights.
Step 1: Start With Materiality and Stakeholders
A practical “S” strategy starts with clarity, not with a long list of indicators.
Ask three foundational questions:
- Who can be most affected by our activities?
Workers (own & value chain), communities around key sites, vulnerable groups, customers, informal workers, etc. - Where are the greatest risks of harm and the strongest potential for positive impact?
High-risk geographies, labour-intensive operations, critical suppliers, major projects, social licence to operate hotspots. - Which social themes are material for us?
e.g., health and safety, living wages, forced labour, non-discrimination, gender equity, inclusion, local employment, community livelihoods.
A good double materiality assessment – aligned with ESRS/GRI logic – helps you prioritise what to measure, where, and for whom.
Step 2: Practical Metrics for Human Rights, DEI, and Community
Once you know what’s material, you can translate it into manageable, decision-useful metrics.
A. Human Rights
Move beyond a single statement of commitment. Useful indicators include:
- Coverage of human rights due diligence (HRDD) across operations and key suppliers
- Number and severity of identified salient human rights risks (with brief descriptions)
- Existence and usage of grievance and whistleblowing mechanisms, disaggregated by stakeholder group
- Number of substantiated human rights incidents and the remediation actions taken
- Percentage of high-risk suppliers covered by social audits or assessments
- Training coverage on human rights for employees and critical suppliers
Even where numbers are low, transparency and clear explanation of process builds trust.
B. DEI (Diversity, Equity & Inclusion)
DEI is both deeply local and globally comparable if defined carefully. Practical metrics:
- Workforce composition by gender and other relevant diversity dimensions across levels (overall, management, leadership, board)
- Hiring, promotion, and attrition rates for underrepresented groups
- Pay equity indicators, such as gender pay gap at different bands
- Inclusion and engagement scores from employee surveys (e.g., “I feel I belong here”)
- Incidents and resolution of discrimination, harassment, or retaliation cases
Crucially, pair numbers with policy and programme narratives – mentoring, flexible work, inclusive hiring practices – so readers see direction of travel, not just a snapshot.
C. Community Impact
Community metrics often stay stuck at “number of beneficiaries” or “amount donated.” To deepen this:
- Distinguish between inputs (funding, volunteer hours), outputs (people reached, programmes delivered), and outcomes (changes in skills, income, resilience).
- Link community initiatives to core business impacts: local employment, supply chains, infrastructure, environmental rehabilitation, health initiatives, etc.
- Where possible, develop multi-year indicators for key programmes (e.g., livelihoods created, students completing education, households gaining energy access).
You don’t need perfect impact measurement on day one. What matters is coherent logic, consistency over time, and honest learning.
Step 3: Turning Social Data Into Decision-Useful ESG Reporting
Collecting social metrics is only half the job. The real value comes when they are:
- Structured across frameworks
Map key indicators to ESRS social standards, relevant GRI disclosures, and your own internal KPIs. Use a single underlying dataset, not multiple disconnected ones. - Integrated into governance and risk
Show how social risks appear in enterprise risk registers, how they are overseen at board level, and how management responds. - Connected to strategy and capital allocation
For example: higher investment in workforce skills and safety in high-risk operations, targeted DEI interventions in leadership pipelines, or long-term community partnerships linked to future projects.
This is where ESG / integrated reporting matures: from “social stories” to social performance management.
How Modern ESG Platforms (Like Ecoactive) Enable Better “S” Reporting
Many of the pain points around social reporting are not conceptual – they’re operational and digital. Platforms such as Ecoactive are designed to address exactly this gap without turning every report into a bespoke manual project.
- Centralised data management
Bring HR, HSE, legal, procurement, CSR, and finance data into a single environment. Avoid endless spreadsheet exchanges and email-based approvals. - In-built validations & audit-ready reporting
Automated checks flag missing values, inconsistent definitions, and unusual trends early. Built-in audit trails support assurance over key social metrics. - Integrated workflows
Configure workflows that mirror how your organisation actually works: data owners, reviewers, approvers across countries and functions – all on a single platform. - Automation, AI, and digital taxonomy alignment
AI-assisted tagging, narrative support, and alignment with digital taxonomies (including XBRL) help convert complex social data into structured, regulator-ready and investor-friendly disclosures. - Multi-framework support
Capture a metric once, then map it to ESRS, GRI, IFRS S1-aligned disclosures, and local requirements, instead of re-building the logic for every framework.
The goal isn’t more data. It’s better-quality social insights, delivered more efficiently, with higher confidence.
The Road Ahead: Making the “S” a Strategic Advantage
As expectations evolve, companies that treat social performance as a compliance chore will struggle. Those that build robust, transparent, and digital-ready approaches to human rights, DEI, and community impact will stand out – with investors, regulators, employees, and communities.
The social factor is not “soft.” It is a direct lens on risk, resilience, and long-term value creation.
Now is the moment for sustainability, finance, compliance, and reporting leaders to bring their social data up to the same standard as their environmental disclosures – supported by the right processes, governance, and platforms.
