Corporate concerns are shifting from environmental issues to social – with human rights, modern slavery and community programmes taking centre stage in corporate ESG strategies.

This is the conclusion of research conducted by consultancy S-RM, whose 2024 ESG Report points to a “seismic shift” as companies re-evaluate their priorities. It says social governance is going to be a bigger strategic and budgetary priority for a “substantial portion” of companies over the next five years.

Nearly a quarter of corporations responding to S-RM’s survey identified 'domestic modern slavery laws' as their foremost regulatory concern, compared with 15% prioritising the Corporate Sustainability Reporting Directive.

Despite the higher threshold of the recently passed CSDDD in Europe, only 13% of corporates considered it the most important regulation for them to consider, suggesting that they may be caught out as the EU progresses its ESG agenda in coming years.

Some 66% of companies expect their ESG budgets to rise within the next five years, with a substantial allocation earmarked for addressing social concerns.

Natalie Stafford, director and head of ESG at S-RM, said: "At S-RM, we recognise the continued importance of addressing the social elements within ESG strategies. Our survey has highlighted the widespread lack of confidence that the social pillar of ESG is being sufficiently tended to, with risks mitigated and value exploited across both investor and corporate groups. There is a clear consensus that social risks are rising up the corporate and investor agendas, driven by a combination of employee retention, shareholder pressure, board instruction, regulation and legislation and consumer and client demand.”

S-RM’s survey was conducted by Coleman Parkes between December 2023 and January 2024 amongst 550 senior ESG decision-makers with corporate organisations, plus 200 senior ESG decision makers within investment firms.

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