In recent years there has been a radical shift towards recognition of the societal role of business in making communities better places to live, with businesses increasingly taking action on, for example, building regulations and measures to combat climate change.
Now there is a move away from simply creating profit for shareholders, towards embracing a broader spectrum of responsibilities to stakeholders including employees and the communities in which businesses operate.
This focus on environmental, societal and governance (ESG) performance is a critical requirement of the world’s largest investors and greatly influences the share price of listed businesses. Knowing that this makes a real difference to the behaviour of investors and markets, businesses have been motivated to take action to improve their record in areas such as air pollution, machine safety and protective clothing in order to secure strong ESG ratings.
ESG has become an important spur to making change happen and the World Risk Poll offers a new view of many ESG issues. For example, investors and business leaders can witness, for the first time in many cases, working people talking about safety and risk in their working environments. Nineteen per cent of workers worldwide say they have been seriously injured while working. Significant numbers, and as many as 50 per cent in some countries, have experienced violence and harassment in the workplace. These are risks which until now have largely been hidden in many countries across the world, and not built into valuations of businesses. And in the modern world, these are risks not just to workers, but they also influence the reputation and share price of employers.
Companies are on a journey, continuing to learn more about the ways in which they can join the traditional impetus to create profit with action on broader ESG issues to contribute to the bottom line. Today these considerations are extending beyond operational factors into areas such as mental health and artificial intelligence.
The power of business to activate change is well known. However, companies need accurate information to ensure that they direct their efforts in ways that will make a real difference. The business community across the world can use Lloyd’s Register Foundation’s new poll to drive measurable action that improves the lives of employees, strengthens communities and delivers improved ESG ratings to create value for investors.