“Social sustainability is about identifying and managing business impacts, both positive and negative, on people. […] 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” (UN Global Compact). Social sustainability is a broad topic dealing with all the impacts on the different groups that are affected by the business.
Human rights. Social sustainability in business is related to universal human rights, the rights that humans have simply by existing. Business can both promote and hinder the achievement of human rights (Vadlamannati et al 2021). The UN declaration of human rights includes 30 articles about the basic rights of humans, the individual rights, the legality of rights, the rights of the individual in the community, the constitutional liberties, the economic, social and cultural rights, and the means of achieving these rights.
Relevant social sustainability issues
Employees want and have the right to among other things safe and healthy jobs, fair salaries, participation, association and communication, and no discrimination. The riskiest occupation in Norway is fisheries, but agriculture and construction are also dangerous. Occupations have become safer over time. Discrimination in the labour market of immigrants and minorities has been and is a social problem (Lippens et al 2022). recent evidence suggests that women are not discriminated against in hiring in Europe (but this of course may vary across sector and country) (Birkelund et al. 2022), but have lower salaries. Employers also discriminate against handicapped (L’Horty et al 2022). The acceptance of labour unions is high in Norway (but not always), but not in all countries.
Workers in the supply chain (especially in poorer countries, with less capable institutions and less worker-friendly legislation) sometimes work under very poor conditions and wages. Some supply chains have slave labour (LeBaron 2021) and child labour.
Customers want safe and good quality products at a transparent and fair price. They want honest and clear communication, privacy, and no discrimination. In many cases, these things are not provided. Sports gambling is fun but have clear negative impact on people’s financial situation (Hollenbeck et al 2024). Television (programmes and advertising) caused 11 million people to start smoking in the period 1946-1971 (Thomas 2019).
Local communities are affected by the company’s operations through employment, taxes and support to local organizations.
Governments and other authorities are affected by following laws or regulations (or not), employment, and taxes. Companies also try to influence (lobby) governments and authorities, to make taxes and regulations more beneficial for themselves. Regarding lobbying on environmental issues, “clean” firms (who want strict regulation) and “dirty” firms (who want no or more lenient regulation) invest more in lobbying than medium performers (Delmas et al 2016).
Corruption is the abuse of power for personal gain. Corruption can happen both in relations with authorities and with other companies. Companies can be victims of corruption, but also engage in corruption. Corruption is a larger problem in some countries than others but exists everywhere.
Other stakeholders and groups may also be important for social sustainability, including competitors, media, NGOs, banks and funders, and shareholders.
Social sustainability at Maersk Group. Maersk Group is a Danish shipping and logistics company with over 100 000 employees and activities in more than 130 countries. In their sustainability report they report on the following main categories under the heading of social sustainability:
> Safety and security. Maersk had a lost-time injury rate (the number of lost-time injuries per million hours worked) of 1.10 in 2023, up from 0.93 the year before. 4 people lost their lives on the job in 2023, down from 9 the year before. Security risks identified by Maersk include “people (our duty of care, travel and expat security), cargo (theft, bribes, non-compliance), illicit cargo (contraband including drugs and illegal wildlife and timber), conflict (armed conflict, terrorism, geopolitical instability) and facilities (customer security compliance)”. Two of Maersk’s ships were attacked by Houthi forces on their way to the Suez Canal. Fortunately, nobody on board the Maersk ships were injured.
> Human capital, where they present how they develop and maintain a motivated work force. Employee engagement went down from 2022 to 2023 and was below targets.
> Diversity, equity and inclusion, presenting initiatives and results regarding diversity and inclusion. Maersk targets 40% women in leadership positions by 2025 and 30% executives from non-OECD-countries. They are almost on track of achieving this, with 35% women in 2023 (up from 33% in 2022) and 20% from non-OECD-countries (up from 16% in 2022).
> Employee relations and labour rights, discussing principles and procedures for securing employee involvement and labour rights in all parts of the organization as well as in the supply chain
> Human rights, presenting how they include human rights issues in their management systems and processes.
Under the “governance”-heading in the sustainability report Maersk presents how they work on several topics related to social sustainability, such as business ethics (including avoiding corruption), sustainable procurement (including how to screen and work with suppliers to secure social sustainability in the supply chain), responsible taxation (from 2023 Maersk publishes the amounts of taxes paid in each country it operates), and citizenship (presenting contributions to disaster relief and collaborations with NGOs)
Sources: Maersk sustainability report 2023, Maersk tax report 2023
References
Birkelund, G. E., Lancee, B., Larsen, E. N., Polavieja, J. G., Radl, J., & Yemane, R. (2022). Gender Discrimination in Hiring: Evidence from a Cross-National Harmonized Field Experiment. European Sociological Review, 38(3), 337–354. https://doi.org/10.1093/esr/jcab043.
Hollenbeck, B., Larsen, P., & Proserpio, D. (2024). The Financial Consequences of Legalized Sports Gambling (SSRN Scholarly Paper 4903302). https://papers.ssrn.com/abstract=4903302
LeBaron, G. (2021). The Role of Supply Chains in the Global Business of Forced Labour. Journal of Supply Chain Management, 57(2), 29–42. https://doi.org/10.1111/jscm.12258.
L’Horty, Y., Mahmoudi, N., Petit, P., & Wolff, F.-C. (2022). Is disability more discriminatory in hiring than ethnicity, address or gender? Evidence from a multi-criteria correspondence experiment. Social Science & Medicine, 303, 114990. https://doi.org/10.1016/j.socscimed.2022.114990
Lippens, Louis, Stijn Baert, Abel Ghekiere, Pieter-Paul Verhaeghe, and Eva Derous. “Is labour market discrimination against ethnic minorities better explained by taste or statistics? A systematic review of the empirical evidence.” Journal of Ethnic and Migration Studies 48, no. 17 (2022): 4243-4276. s10818-017-9243-1.
Thomas, M. (2019). Was Television Responsible for a New Generation of Smokers? Journal of Consumer Research, 46(4), 689–707. https://doi.org/10.1093/jcr/ucz024
Vadlamannati, K. C., Janz, N., & de Soysa, I. (2021). U.S. Multinationals and Human Rights: A Theoretical and Empirical Assessment of Extractive Versus Nonextractive Sectors. Business & Society, 60(8), 2136–2174. https://doi.org/10.1177/0007650320928972