As we reflect on the year 2023, it's important to highlight the most significant ESG controversies that made headlines. Our last article in this series focused on the environmental aspect. This time, we turn our attention to the social pillar of ESG, focusing on issues such as strikes, layoffs, human rights violations, and discrimination against minority groups. We emphasize the need for accountability and action to address these pressing social issues and promote social responsibility.
Social Risks: Focus 2023
In 2023, social risks were the most significant, with layoffs and strikes gaining significant attention. It's crucial to acknowledge these social risks and take accountability and action to address them, as they underscore the urgent issues facing society.
Figure 1: Social risks in 2023.
Social Controversies of 2023
Social risks have taken the forefront in 2023, with notable web mentions increasing significantly. Here are the most relevant controversial topics:
Social discourse intensified at the start of the year, with news of widespread strikes in various sectors, including aviation and education, primarily driven by pay disputes. The wave of layoffs in several tech companies was the talk of the town, especially during the first quarter of the year.
Respect for Human Rights
The year saw an uptick in mentions related to human rights, especially controversies surrounding racism, data privacy violations, sexual harassment, and breaches of GDPR.
Diversity and Inclusion
Figure 2: Top social sub-risks in 2023.
Top 5 Social Controversies
These controversies are ranked by relative volume*.
Volume of mentions: 8,903
Relative volume: 87%
McDonald's faced substantial social risks in 2023 due to significant layoffs of its corporate staff in April. The move led to public concern and discussions around the company's employment practices and stability. (source)
Volume of mentions: 13,504
Relative volume: 43%
Google found itself in the spotlight as it faced challenges related to major layoffs in January and October of 2023. These layoffs contributed to almost half of the social risk mentions associated with the tech giant. (source)
Volume of mentions: 10,965
Relative volume: 38%
Meta, formerly known as Facebook, also faced scrutiny as 38% of the company's social risk mentions revolved around layoffs that took place in March and October 2023. (source)
Volume of mentions: 6,060
Relative volume: 28%
Microsoft faced challenges due to disruptions caused by cyberattacks in early June. In addition, the company had to navigate through controversies related to layoffs, contributing to its social risks. (source)
- X (formerly Twitter)
Volume of mentions: 7,246
Relative volume: 8%
X/Twitter experienced a global outage, which was followed by significant layoffs. These events led to considerable public discussions and social risks for the company. (source)
In summary, environmental risks remain a major concern for ESG, but the social pillar of ESG has become increasingly critical, especially in 2023. As we move forward, it's important for companies to acknowledge and address social risks, such as layoffs, strikes, human rights violations, and diversity and inclusion issues. By promoting social responsibility, companies can make a positive impact on society, create a more sustainable future, and enhance their reputation as socially responsible organizations.
Click here to learn about the top environmental and governance controversies in 2023.
Relative volume*: Relative to the total volume of E, S, or G risks for the company during the same period.
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