SLCP & ESG Part 3: Navigating ESG- The transformative power of social and labor data
Building upon the insights from our ESG brief series that covers voluntary and mandatory ESG reporting, this article highlights the increasing need for verified social and labor data in navigating mandatory ESG standards. This shift towards more ingrained ESG principles in corporations will see not only traditional economic growth at the core of companies, but a more holistic approach that must value sustainable economic practices and understand human rights impacts. Part of this new normal is that companies must be prepared to publicly report on their ESG impacts, backed by credible social and labor data including from SLCP’s Converged Assessment Framework (CAF). This is now a global mandate, not an option.
The “S” in ESG - A complex dimension
The 'S' in ESG represents Social, a dimension that, unlike the other two, presents a more complex definition. While Environmental and Governance aspects are mainly concerned with a company's effects on the planet and its internal and political operations, the social aspect emphasizes the relationships a company fosters with individuals both inside the organization and in the broader community. This includes a range of areas including the company’s health and safety protocols, its commitment to diversity, equality, inclusion, and how management interacts with employees. It can also involve assessing the company’s engagements with local community leaders, reviewing labor practices like forced or child labor among suppliers, and ensuring product safety.
At times, and in some instances due to its breadth and complexity, the S element of ESG falls behind. However, for SLCP, the desire of companies and regulators to make progress on the S dimensions adds to the usefulness of SLCP data.
SLCP and CAF - Tool for transformation
In this context, the critical role of social and labor data is undeniable. SLCP provides essential raw social and labor data that can be used as part of companies’ approaches to social reporting. This data, with scoring from tools like the Sustainable Apparel Coalition’s Social & Labor Facility Module (FSLM), can contribute to credible ESG reporting. This data is often used by stakeholders regarding workers in the value chain, as highlighted in Worldy’s recent analysis on tools for CSRD compliance.
"SLCP data can be used as a trusted foundation for ESG reporting, valued for its credibility, harmonization, and rigorous verification – a reliable source driving transparency in sustainable practices. With the complexities of new reporting regulations, SLCP’s CAF is rightfully seen as a solution for understanding the S dimension of ESG, and ultimately reaching compliance.” – Jeremy Lardeau, Sustainable Apparel Coalition
Why SLCP data is useful for ESG Reporting
SLCP’s publicly available Converged Assessment Framework (CAF), is an innovative tool that collects and verifies data on social and labor conditions. Used by over 10,000 facilities globally, the data gathered and verified is instrumental in reshaping companies' approaches to ESG reporting and to ensure compliance with the mandatory requirements. By facilitating a more streamlined comparison and analysis of social and labor data, CAF also supports the development and execution of more efficient improvement programs. This not only strengthens the credibility of social audits but also promotes a corporate culture of transparency and accountability, aligning with the growing emphasis on corporate responsibility in global business practices.
A step towards global change
In the rapidly evolving world of corporate responsibility, the need for companies to adapt to evolving ESG standards is clear. With a heightened focus on human rights due diligence and ESG adherence, the role of SLCP becomes increasingly vital. SLCP's CAF stands out not just as a compliance tool but as a catalyst for real change, equipping companies with standardized, actionable and shareable data. This enables businesses to meet legal requirements while also exceeding the ethical expectations of stakeholders and the wider society.
While we are resolute in our commitment to advancing ESG principles, we recognize the complexities and different needs of organizations in this journey. As such, we position ourselves not as a one-stop shop, but as specialized partners in social and labor aspects of ESG reporting. We believe in a collaborative approach, where our expertise complements organizational needs, paving the way for a more sustainable and accountable future.
Nonetheless, as we advance towards a future that demands greater accountability and sustainability, the adoption of tools like SLCP’s CAF is important. For any organization committed to making a positive impact on the global stage, embracing SLCP's tool is more than beneficial to ESG reporting —it's a fundamental step towards improving labor conditions worldwide.
