Environmental, social and governance programs can be a key differentiator for talent when comparing their options for contingent work. Having such a program in place helps demonstrate that a company cares for its people, the environment and social good. 

ESG policies help companies recruit and retain talent and build their reputation, according to Carolyn Berkowitz, president and CEO of the Association of Corporate Citizenship Professionals. And companies with such policies also boast a 4.5% higher profit margin compared to others. 

“ESG really is about putting people at the center of a strategy,” Berkowitz says. “And when you put people first — whether it’s people who are impacted by the environment and thinking in that way, whether it’s the governance of the company and how it works with its employees, whether it’s the social elements, how employees change communities and how employees are treated, and supplier diversity, et cetera — all of those things are what combine to build a company’s ESG profile.” 

ACCP is seeing increased interest from organizations as well as from the workforce. Its research finds that 70% of job seekers are more likely to apply for and accept a position or an offer from a socially responsible company, and 49% of consumers said they would accept a lower salary to work at a company that they consider to be socially responsible. In addition, 78% of companies report that the employees are aware of and passionate about corporate social responsibility and 65% of them believe that it impacts their retention rates. 

ESG and Contingent Workers 

“Employers’ attitudes toward ESG as it relates to employees — and particularly contingent workers like contractors, freelancers and temporary staff — have evolved tremendously as businesses have started placing greater emphasis on responsible and sustainable practices, and in areas like social responsibility and fair treatment, diversity and inclusion, transparency in workforce practices and employee engagement,” says David Satterwhite, CEO of Chronus, a purpose-driven development platform providing mentorship and ERG management solutions. “At the same time, research shows a strong ESG proposition correlates with higher equity returns.” 

Therefore, when it comes to social responsibility and fair treatment, many employers are recognizing that their social responsibility under the ESG framework extends beyond full-time employees to contingent workers, according to Satterwhite.  

“Traditionally, contingent workers might not have had access to the same benefits, career development opportunities, or protections as permanent staff. However, with a focus on social equity, companies are beginning to address this gap,” he says. This comes about through development opportunities (mentoring, coaching, training), fairer wages and workplace protections regardless of employment status. 

DE&I. Diversity, equity and inclusion practices have often been thought of in terms of hiring full-time workers, but now companies are putting more emphasis on inclusive hiring practices across the board, including contingent workers, vendors and contractors companies work with.  

Transparency. Companies are expected to govern their entire workforce, including contingent workers, with transparency and accountability. For example, ensuring that labor laws, workplace safety regulations, and ethical treatment are applied to all workers, regardless of their employment status, is becoming a focus area under ESG.  

“This has come to light in part, because of the reputational risk and branding hit that can come from missteps here,” Satterwhite says. 

Employee engagement. Companies are extending engagement programs such as wellness initiatives, mental health support and access to professional development and mentorship to their contingent workers as well as staff employees.  

“This is essential to building a cohesive and sustainable work environment at every stage of the employee journey,” he says. 

Green ‘Hushing’ 

Another survey cited by ACCP queried about how the political, legal and news environment surrounding ESG and corporate responsibility is impacting organizations’ work in this area. 

“By far, most companies said that they are not stopping the work,” Berkowitz says. “The biggest thing that is changing is the language that we are using when we describe these things.”  

More than 60% reported they are changing the language they use, such as the name of the department, or the name of the report that they issue, but they’re not necessarily changing the work they are doing.  

“We call it ‘green hushing,’” she says. Whereas “green washing” is when an organization overstates what it is doing to appear more environmentally friendly, ‘green hushing’ is the opposite. “With the concerns about backlash, companies are responding by changing the language in ways that can be adopted and appreciated by all, because it is still somewhat misunderstood.” 

Murky Waters Ahead 

Despite potential benefits, ESG programs in the US have their detractors. DE&I in particular has seen increased backlash, with several high-profile announcements of companies dropping their initiatives.   

In addition, President-elect Donald Trump’s incoming administration is likely to scrutinize ESG programs carefully. 

“ESG has become a divisive issue in the US with opinions split along party lines and some prominent critics including Donald Trump and Elon Musk,” wrote Fiona Coombe, SIA’s director of legal and regulatory research, in the ESG Reporting and Due Diligence in Contingent Workforce Management report. 

By July 2023 lawmakers in 37 states had introduced approximately 165 anti-ESG proposals seeking to limit state fund managers’ usage of ESG data, or punish those companies deemed to be boycotting certain industries, according to Coombe’s report, which was issued in June 2024. However, only about 15% were approved, including 22 anti-ESG laws signed into law and six resolutions passed by legislatures.  

“That left 137 proposals (nearly 85%) that were voted down, abandoned, or stalled despite a coordinated, well-funded effort to swiftly pass as much of this legislation as possible,” Coombe wrote. 

More Than a Mission Statement  

As SIA Executive Director of Global Research John Nurthen explains, ESG is not for the fainthearted. And the next four years will be an interesting — and likely challenging — time for ESG proponents.  

“It requires a much more serious commitment than crafting a mission statement,” Nurthen wrote last year. “It demands specificity and an obligation to set targets, as well as ways of measuring performance. While your mission statement might claim that you operate with integrity and ethics, ESG requires that you prove it.” 

CWS 3.0 will continue the ESG discussion in an upcoming issue. To provide insights or comments, please contact Managing Editor Katherine Alvarez at [email protected].