Social (S) Resources

Resources organized by Stakeholder Theory Framework (Freeman, 1984).

Stakeholder theory posits that companies must manage relationships with all stakeholders—not just shareholders—including employees, customers, suppliers, communities, and society at large. This framework provides the most comprehensive and widely accepted theoretical foundation for the Social dimension of ESG.

Framework Origin: Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Boston: Pitman.
Key Principle: “Companies create value by managing relationships with stakeholders whose interests are affected by corporate activities.”

Framework Overview

The Social dimension is organized into five core stakeholder categories, each representing critical relationships that companies must manage for long-term value creation:

Category Primary Stakeholders Key ESG Standards Status
👷 Human Capital & Labor Employees, workers GRI 401-406, SASB Material for all sectors
⚖️ Human Rights Workers, communities, society GRI 408-414, UNGP Increasing materiality
🛡️ Product Responsibility Customers, end-users GRI 416-418, SASB Sector-specific
🤝 Community Relations Local communities, society GRI 413, SASB Sector-specific
🔗 Supply Chain Ethics Suppliers, business partners GRI 308, 414, SASB Growing importance

👷 1. Human Capital & Labor Practices

Primary Stakeholders: Employees, contract workers, temporary staff
Theoretical Foundation: Human Capital Theory (Becker, 1964), Stakeholder Theory

Overview

Human capital represents the knowledge, skills, health, and well-being of a company’s workforce. Investment in human capital drives productivity, innovation, and long-term competitive advantage.

Key Topics

Employment & Labor Standards

  • Employment contracts and job security
  • Fair wages and living wages
  • Working hours and work-life balance
  • Freedom of association and collective bargaining
  • Labor relations and union engagement

Health, Safety & Well-being

  • Occupational health and safety (OHS)
  • Workplace injury and fatality rates
  • Mental health and psychosocial risks
  • Employee wellness programs
  • Pandemic preparedness

Training & Development

  • Employee training and education
  • Skills development and reskilling
  • Career advancement opportunities
  • Leadership development
  • Succession planning

Diversity, Equity & Inclusion (DEI)

  • Gender diversity and pay equity
  • Racial and ethnic diversity
  • Age diversity and intergenerational workforce
  • LGBTQ+ inclusion
  • Disability inclusion and accessibility
  • Inclusive leadership and culture

Employee Engagement

  • Employee satisfaction and engagement
  • Employee turnover and retention
  • Internal communication
  • Employee voice and participation
  • Organizational culture
  • GRI 401: Employment
  • GRI 402: Labor/Management Relations
  • GRI 403: Occupational Health and Safety
  • GRI 404: Training and Education
  • GRI 405: Diversity and Equal Opportunity
  • GRI 406: Non-discrimination
  • SASB: Human Capital metrics (all sectors)
  • ISO 45001: Occupational Health and Safety Management
  • SA8000: Social Accountability Standard

Resources

Simon Mak’s Books

  • Social Impact Accounting in Practice: Measuring human capital value
  • ESG & GRI Reporting Made Simple: GRI 401-406 implementation

Academic References

  • Becker, G. S. (1964). Human Capital: A Theoretical and Empirical Analysis. Chicago: University of Chicago Press.
  • Schultz, T. W. (1961). “Investment in Human Capital.” American Economic Review, 51(1), 1-17.

Explore Human Capital Resources →

⚖️ 2. Human Rights

Primary Stakeholders: Workers, communities, indigenous peoples, vulnerable groups
Theoretical Foundation: Rights-Based Approach, Stakeholder Theory

Overview

Human rights are fundamental rights and freedoms that belong to every person. Companies have a responsibility to respect human rights throughout their operations and value chains, as outlined in the UN Guiding Principles on Business and Human Rights (UNGPs).

Key Topics

Fundamental Labor Rights

  • Freedom from forced labor and modern slavery
  • Elimination of child labor
  • Freedom of association and collective bargaining
  • Non-discrimination in employment

Supply Chain Human Rights

  • Supplier labor standards and audits
  • Conflict minerals and responsible sourcing
  • Human trafficking in supply chains
  • Migrant worker rights
  • Subcontractor accountability

Indigenous Rights

  • Free, Prior, and Informed Consent (FPIC)
  • Land rights and traditional territories
  • Cultural heritage protection
  • Benefit-sharing arrangements
  • Indigenous employment and procurement

Community Rights

  • Right to water and sanitation
  • Access to land and resources
  • Resettlement and displacement
  • Security and conflict zones
  • Access to remedy and grievance mechanisms

Digital Rights

  • Data privacy and protection
  • Surveillance and monitoring
  • Algorithmic bias and discrimination
  • Digital inclusion and access
  • UN Guiding Principles on Business and Human Rights (UNGPs)
  • OECD Guidelines for Multinational Enterprises
  • GRI 408: Child Labor
  • GRI 409: Forced or Compulsory Labor
  • GRI 410: Security Practices
  • GRI 411: Rights of Indigenous Peoples
  • GRI 412: Human Rights Assessment
  • GRI 414: Supplier Social Assessment
  • SASB: Human rights metrics (sector-specific)
  • ILO Core Conventions: International labor standards

Resources

Simon Mak’s Books

  • ESG & GRI Reporting Made Simple: GRI 408-414 implementation
  • Supply Chain & Business Ethics: Human rights due diligence

Academic References

  • Ruggie, J. G. (2013). Just Business: Multinational Corporations and Human Rights. New York: W. W. Norton.
  • Freeman, R. E., & Liedtka, J. (1991). “Corporate Social Responsibility: A Critical Approach.” Business Horizons, 34(4), 92-98.

Explore Human Rights Resources →

🛡️ 3. Product Responsibility & Customer Welfare

Primary Stakeholders: Customers, end-users, consumers
Theoretical Foundation: Consumer Rights Theory, Stakeholder Theory

Overview

Product responsibility encompasses a company’s duty to ensure the safety, quality, and ethical marketing of its products and services. This includes protecting customer data, ensuring product safety, and providing accurate information.

Key Topics

Product Safety & Quality

  • Product safety standards and testing
  • Quality control and assurance
  • Product recalls and defect management
  • Consumer health and safety
  • Hazardous materials and chemicals

Data Privacy & Security

  • Personal data protection (GDPR, CCPA)
  • Cybersecurity and data breaches
  • Customer consent and transparency
  • Data retention and deletion
  • Third-party data sharing

Responsible Marketing

  • Truth in advertising
  • Marketing to vulnerable populations (children, elderly)
  • Misleading claims and greenwashing
  • Responsible use of AI in marketing
  • Ethical pricing practices

Customer Satisfaction & Service

  • Customer satisfaction and feedback
  • Complaint handling and resolution
  • Product accessibility and usability
  • Customer education and support
  • Warranty and after-sales service

Access to Essential Services

  • Affordable access to healthcare, finance, utilities
  • Digital inclusion and accessibility
  • Financial inclusion and responsible lending
  • Universal service obligations
  • Serving underserved communities
  • GRI 416: Customer Health and Safety
  • GRI 417: Marketing and Labeling
  • GRI 418: Customer Privacy
  • SASB: Product quality and safety (sector-specific)
  • ISO 26000: Consumer issues
  • GDPR: General Data Protection Regulation (EU)
  • CCPA: California Consumer Privacy Act

Resources

Simon Mak’s Books

  • ESG & GRI Reporting Made Simple: GRI 416-418 implementation

Academic References

  • Kennedy, J. F. (1962). “Special Message to the Congress on Protecting the Consumer Interest.” (Four basic consumer rights)
  • Kotler, P., & Armstrong, G. (2018). Principles of Marketing. Pearson.

Explore Product Responsibility Resources →

🤝 4. Community Relations & Social Impact

Primary Stakeholders: Local communities, civil society, NGOs
Theoretical Foundation: Social Capital Theory (Putnam, 1993), Stakeholder Theory

Overview

Community relations encompass a company’s interactions with and impacts on the communities where it operates. Strong community relationships build social license to operate and create shared value.

Key Topics

Community Investment & Development

  • Community investment programs
  • Local economic development
  • Infrastructure development
  • Education and skills training
  • Healthcare and public health initiatives

Social License to Operate

  • Stakeholder engagement and consultation
  • Community impact assessments
  • Benefit-sharing agreements
  • Local content and procurement
  • Community grievance mechanisms

Local Economic Impact

  • Local employment and hiring
  • Local supplier development
  • Tax contributions and transparency
  • Economic multiplier effects
  • Avoiding community displacement

Philanthropy & Volunteering

  • Corporate philanthropy and donations
  • Employee volunteering programs
  • Disaster relief and humanitarian aid
  • Strategic philanthropy alignment
  • Impact measurement and reporting

Community Health & Education

  • Access to healthcare services
  • Disease prevention and health promotion
  • Educational infrastructure and programs
  • Scholarships and capacity building
  • Cultural and recreational facilities
  • GRI 413: Local Communities
  • GRI 203: Indirect Economic Impacts
  • SASB: Community relations (sector-specific)
  • IFC Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts
  • ISO 26000: Community involvement and development

Resources

Simon Mak’s Books

  • Social Impact Accounting in Practice: SROI and community impact measurement

Academic References

  • Putnam, R. D. (2000). Bowling Alone: The Collapse and Revival of American Community. New York: Simon & Schuster.
  • Porter, M. E., & Kramer, M. R. (2011). “Creating Shared Value.” Harvard Business Review, 89(1/2), 62-77.

Explore Community Relations Resources →

🔗 5. Supply Chain & Business Ethics

Primary Stakeholders: Suppliers, business partners, contractors
Theoretical Foundation: Institutional Theory, Stakeholder Theory

Overview

Supply chain ethics encompasses responsible sourcing, supplier management, and ethical business practices throughout the value chain. Companies are increasingly held accountable for the social and environmental impacts of their suppliers.

Key Topics

Responsible Sourcing

  • Supplier codes of conduct
  • Supplier audits and assessments
  • Conflict minerals and responsible minerals sourcing
  • Sustainable procurement policies
  • Fair trade and ethical sourcing

Supplier Diversity

  • Diverse supplier programs (women, minorities, SMEs)
  • Local supplier development
  • Supplier capacity building
  • Inclusive procurement practices

Supply Chain Transparency

  • Supply chain mapping and traceability
  • Tier 1, 2, 3+ supplier visibility
  • Public disclosure of supplier lists
  • Blockchain and technology for transparency
  • Certification and verification

Business Ethics

  • Anti-corruption and anti-bribery
  • Fair competition and antitrust
  • Conflicts of interest
  • Ethical decision-making frameworks
  • Whistleblower protection

Anti-Corruption

  • FCPA, UK Bribery Act compliance
  • Gifts, hospitality, and entertainment policies
  • Third-party due diligence
  • Political contributions and lobbying transparency
  • Anti-money laundering (AML)
  • GRI 308: Supplier Environmental Assessment
  • GRI 414: Supplier Social Assessment
  • GRI 205: Anti-corruption
  • GRI 206: Anti-competitive Behavior
  • SASB: Supply chain management (sector-specific)
  • ISO 20400: Sustainable Procurement
  • OECD Due Diligence Guidance: Responsible business conduct

Resources

Simon Mak’s Books

  • ESG & GRI Reporting Made Simple: GRI 308, 414 implementation

Academic References

  • Crane, A., & Matten, D. (2016). Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. Oxford University Press.
  • Locke, R. M. (2013). The Promise and Limits of Private Power: Promoting Labor Standards in a Global Economy. Cambridge University Press.

Explore Supply Chain Ethics Resources →

Stakeholder Theory: Theoretical Foundation

Core Principles

1. Stakeholder Identification
Companies must identify all groups and individuals who can affect or are affected by corporate activities.

2. Stakeholder Engagement
Companies must engage with stakeholders to understand their interests, concerns, and expectations.

3. Stakeholder Balancing
Companies must balance competing stakeholder interests to create long-term value for all.

4. Stakeholder Accountability
Companies are accountable to all stakeholders, not just shareholders.

Stakeholder Mapping

Stakeholder Group Power Legitimacy Urgency Engagement Strategy
Employees High High High Involve & Collaborate
Customers High High High Involve & Consult
Suppliers Medium High Medium Consult & Inform
Communities Medium High Variable Consult & Inform
NGOs Medium High Variable Consult & Monitor
Regulators High High High Comply & Collaborate
Investors High High High Involve & Report

Integration with ESG Standards

Social Category GRI Standards SASB IFRS S1 UN SDGs
Human Capital 401-406 All sectors Indirect SDG 3, 5, 8
Human Rights 408-414 Select sectors Indirect SDG 8, 10, 16
Product Responsibility 416-418 Select sectors Indirect SDG 3, 12
Community Relations 203, 413 Select sectors Indirect SDG 1, 11, 17
Supply Chain Ethics 205, 308, 414 Select sectors Indirect SDG 8, 12, 16

Why Stakeholder Theory?

Comprehensive Coverage

Stakeholder theory captures all material social relationships and impacts, from employees to communities to customers.

Alignment with ESG Standards

Major ESG standards (GRI, SASB, IFRS) are grounded in stakeholder-oriented thinking, making this framework highly relevant.

Long-Term Value Creation

Research shows that companies that effectively manage stakeholder relationships outperform peers over the long term.

Ethical Foundation

Stakeholder theory provides a normative ethical framework for corporate responsibility beyond shareholder primacy.

Academic References

Foundational Works

  1. Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Boston: Pitman.

  2. Freeman, R. E., Harrison, J. S., & Wicks, A. C. (2007). Managing for Stakeholders: Survival, Reputation, and Success. New Haven: Yale University Press.

  3. Donaldson, T., & Preston, L. E. (1995). “The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications.” Academy of Management Review, 20(1), 65-91.

  4. Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts.” Academy of Management Review, 22(4), 853-886.

Complementary Theories

  1. Bourdieu, P. (1986). “The Forms of Capital.” In J. Richardson (Ed.), Handbook of Theory and Research for the Sociology of Education (pp. 241-258). New York: Greenwood.

  2. Coleman, J. S. (1988). “Social Capital in the Creation of Human Capital.” American Journal of Sociology, 94, S95-S120.

  3. Becker, G. S. (1964). Human Capital: A Theoretical and Empirical Analysis. Chicago: University of Chicago Press.

Recent ESG Research

  1. Wang, C., et al. (2024). “The Relationship between ESG Performance and Corporate Performance Based on Stakeholder Theory.” SHS Web of Conferences.

  2. Talan, G., et al. (2024). “From ESG to Holistic Value Addition: Rethinking Sustainable Business.” International Review of Financial Analysis.

Disclaimer: The stakeholder theory framework represents current academic understanding and is subject to ongoing research and development. Stakeholder categories and priorities may vary by industry, geography, and company context.

Sources: Academic literature, ESG standards (GRI, SASB, IFRS), stakeholder theory research. </small>