Sixty-four percent of employers say it is now either a priority or important to them to work with employee benefits companies that have a strong ESG (Environmental, Social and Corporate Governance) policy, according to data from GRiD, the industry body for the group risk sector.
Of these, 43% stated that they have a specialist team to evaluate the ESG credentials of potential employee benefits partners. This figure has risen from 19% just 12 months ago, demonstrating the significance that organisations now place on, not only their own ESG policies, but also those of the suppliers they are considering working with.
Katharine Moxham, spokesperson for GRiD, said: “In today’s corporate world, ESG is far-reaching: ensuring good stewardship of nature, society and people penetrates every level. This includes which employee benefits partners an employer chooses to align itself with, as this encourages good ESG practises in other organisations too.”
Other measures used by employers who take the ESG credentials of their employee benefits partners seriously are:
- 42% ensure that the potential partner has a published ESG statement that covers the expected areas
- 3% use a scoring matrix to make an assessment
Katharine Moxham continued: “When tendering for new business, benefits providers should prepare for more scrutiny from employers and their intermediary partners. Although many employers require a published statement of ESG intentions, this is now more likely to be a starting point for discussion and one of many factors that are carefully considered, not the only measure as it once perhaps was.”
Recruitment and retention
Ensuring an employer has sound ESG credentials is also important from an employee perspective:
- 44% of employees say it is a priority or important for them to work for a company that has a strong ESG policy
- 39% of employees also say that it is a priority or important that the partners and suppliers their employer chooses to work with, also have a strong ESG policy.
Katharine Moxham concluded: “We’re likely to see increasing numbers of employees demanding more of their employers and their employee benefits partners in the future.
“It is clear that ESG must be lived and breathed throughout benefits provision as it should throughout an entire organisation.”