The S in ESG: Priorities, Trends, Forecasts


ActionFunder recently surveyed ESG leaders across the country to understand how the private sector is responding to rising social needs. We asked if and how their ESG priorities reflect the social impact they want to create and what changes they will make to their social impact programs in the year to come.

You can get the full survey findings in our 2023 Social Impact Report: Businesses at the Heart of Community

Here are the highlights.

  • Social Impact Priorities – what are ESG leaders focused on?
    • ESG leaders are finally starting to give Social impact equal priority to environmental impact.
    • Community support is becoming increasingly important to businesses.
  • Social Impact Trends – what social impact trends and activities are on the rise?
    • The vast majority of businesses are giving to local non-profits.
    • Many businesses are giving time and goods when what non-profits need most is funding.
    • Support for non-profits is more critical than ever.
  • Social Impact Forecast – what’s coming next?
    • Businesses will increase the amount of funding they give to non-profits in 2023.

Let’s take a deeper look to understand where ESG priorities lie, rising social impact trends across the landscape, and our prediction for what lies ahead.

Priority #1: The “S” in ESG is on the rise

We know that environmental impact has been top of mind for businesses over the last decade, really since the UK passed its original Climate Change Act in 2008. Rightly so. The climate crisis is in full force.

Some world events (like George Floyd’s murder, the #MeToo movement, and continual attacks on trans and gay rights) have shown up and advanced ED&I agendas. But as a whole, responses to the climate emergency have often pushed social initiatives to the back seat.

We’re starting to see a shift here. Between living through a pandemic over the last couple of years and being thrust into the Cost of Living Crisis, the health and well-being of our people and communities are becoming more important than ever.

And the data shows this. 70% of ESG leaders will increase social impact budgets in 2023. This demonstrates that businesses are making meaningful progress toward balancing the priorities of people and profits.

Get the full report to see what the other 30% are doing with their budgets.

Priority #2: Community support is becoming increasingly important

ESG leaders ranked their top 3 social priorities.

  • Health & safety and ED&I are nearly tied for first place.
  • Community impact comes in as a close third.

This order of priorities really is no surprise, given the current state of our world and business landscape.

The COVID-19 pandemic placed health and safety front and centre for company leaders. After all, if companies don’t take care of their people, they won’t have much of a future.

With the growing global movement to put an end to racism and gender discrimination, ED&I is rightly becoming a bigger priority for many businesses. Leaders are coming to intimately understand that they must create more equitable, diverse, and inclusive organisations.

When we start to look at expanding social impact beyond company walls, community support is the thing ESG leaders care most about.

Social Impact Trend #1: The vast majority of businesses are giving to local non-profits.

But what does community support look like? One of the most common ways it shows up is in businesses giving money, time, and other resources to non-profit organisations that are making a difference in local communities.

It’s been proven that alliances between businesses and non-profits are one of the best social impact strategies. Local non-profits are uniquely qualified to meet frontline needs. They understand community challenges and can get a lot with few resources.

We were excited to see that 89% of the businesses we surveyed are actively giving to non-profits and community groups.

The report goes into more detail on this trend, including:

  • The measurable benefits of non-profit giving
  • And what’s stopping the other 11% from supporting non-profits

Social Impact Trend #2: Businesses are giving more time than money.

Not all community support programs look alike. We connect many businesses with non-profits that need support, so we’ve seen all kinds of approaches. Some organise donation drives or volunteer events. Others offer pro-bono services or give direct funding.

It seems the majority of businesses focus on giving time or goods.

  • 85% have volunteered time or services, and donated goods and products.
  • Only 64% have given direct funding.

But donations of goods and volunteering might not be the best use of ESG budgets. There’s a strong business case to choose funding over volunteering, including the fact that funding is what non-profits need most.

Social Impact Trend #3: Non-profits need funding more than time.

We put out a survey to the 4,000 non-profit leaders on the ActionFunder platform to understand what type of help they most need right now.

82% of non-profits need funding more than anything else.

Due to the Cost of Living Crisis, their food, fuel, and supply costs have gone up. Small donations are down and grants are becoming scarce. At the same time, more people are turning to these organisations for support, including food, shelter, and help paying energy bills.

Not only is it getting harder for non-profits to serve communities at the scale needed, but many are struggling to survive.

“Our main source of income is from our supporters but most of them have been severely hit by the increased cost of living. At the same time costs for running our services have increased so we have had to reduce the days we can open because of overheads. Our only staff member had to take a substantial pay cut and work part-time elsewhere. This is particularly distressing as our clients’ needs have also increased – we support low-income families and older people in our challenged neighbourhood but we are no longer able to offer them the support we used to.”

Fiona Hirons, The Hope Hub at Hope Community Church

The bottom line is that everyone is feeling the impact. A whole lot of people need help right now. Community-based non-profits are ready to offer support and are well-positioned to do so. But they need funding. With reductions in public and individual funding, non-profits are turning to the private sector.

Forecast: Businesses and non-profits will rally to align ESG priorities and help communities

We’re hopeful that businesses will step up en masse to support local communities. We can see evidence of this starting to happen.

62% of ESG leaders plan to increase budgets for non-profit giving next year. Plus, there’s been a surge in projects being funded through the ActionFunder platform: nearly 370 projects have received more than £1 million in funding in the past year.

With the rising social need, now is definitely the time for businesses to examine their ESG priorities and roles in communities. People need us to rally together and channel resources into life-saving community programs.

Non-profits in our network are currently seeking £16 million in funding for projects that could benefit 6 million people. This translates to a tenth of the UK population in need of help. If your business is ready to take action, book a no-obligation demo to find out how the ActionFunder platform can support your community investment programme.

For more insights on the State of Business-to-Community Action, grab a copy of our 2022-2023 Report.
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