4. Board and Executive Diversity
One of the most important trends in the ESG space right now is looking at an organization’s diversity on its executive teams and their corporate hierarchy. What was once an opaque process for deciding who gets promoted and elevated to executive positions, now has a push for more transparency and accountability by every level of the company. Investors are measuring the success of companies not just on the dollars and cents, but on who is running them, and what their diversity makeup is.
5. Supply Chain Pressures
With the COVID-19 pandemic, companies have undergone enormous pressure around supply chains and how dependent on foreign countries they are. Additionally, companies that do business in countries with lax labor standards, or severely undervalue their employees, are being met with heightened public scrutiny. One of the growing trends around ESG and supply chains is an emphasis on due diligence and making sure supply chains do not harbor risk to small businesses or the labor force that creates it.
6. Protests and Social Movements
Despite a global pandemic, in many ways, 2020 was defined by the social movements that gained new traction. Anti-racism and anti-discrimination policies are being prioritized and positioned in new ways at organizations that were previously left up to an HR department or outside consulting.
Now, taking stances on the latest social movement has become common practice for organizations of all sizes to make their voice and opinion heard. Organizations are facing increasing pressure from the public to address what is going on in the news and to make changes internally as a result.
7. Social Media and Youth Engagement
Younger audiences care about where they are getting their products from, and what their environmental and social footprint is, more than any previous generation. And they’re more vocal about it. Add to that the fact social media has allowed unprecedented access to the inner workings of organizations and given the public a direct voice in the boardroom. Social media now directly impacts public perception faster than legislation and regulations can attempt to catch up.
8. Biodiversity and Exogenous Factors
With COVID-19, many of the structural flaws around parts of the economy are being taken into consideration for strategic decisions going forward. Investors are looking at how much the biodiversity of the planet will be affected by corporate goals, and similarly, how these goals can be diverted by exogenous and unforeseen factors like a global pandemic or natural disaster.
Organizations of all sizes around the globe are addressing the interdependence between expanding their business across borders and the direct toll it will take on the environment.
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