Social sustainability is about identifying and managing business impacts, both positive and negative, on people. The quality of a company’s relationships and engagement with its stakeholders is critical. Directly or indirectly, companies affect what happens to employees, workers in the value chain, customers and local communities, and it is important to manage impacts proactively.
Businesses’ social license to operate depends greatly on their social sustainability efforts. In addition, a lack of social development, including poverty, inequality and weak rule of law, can hamper business operations and growth. At the same time, actions to achieve social sustainability may unlock new markets, help retain and attract business partners, or be the source for innovation for new product or service lines.
Internal morale and employee engagement may rise, while productivity, risk management and company-community conflict improve. The first six of the UN Global Compact’s principles focus on this social dimension of corporate sustainability, of which human rights is the cornerstone. Social sustainability also covers the human rights of specific groups: labour, women’s empowerment and gender equality, children, indigenous, handicapped persons, as well as people-centered approaches to business impacts on poverty. As well as covering groups of rights holders, social sustainability encompasses issues that are affecting them, for example, education and health.