Global benefits under pressure to align with ESG principles
In today’s rapidly evolving world, ESG (environmental, social and governance) principles are no longer optional, they are essential.
Businesses face pressure to align their practices with these principles, to protect the planet and to meet the expectations of their workforce.
For employers, ESG-aligned benefits are becoming a strategic advantage. Recent data from Group Risk Development (GRiD) highlights this shift:
- 86% of UK HR decision-makers prioritise ESG-aligned benefits providers, and
- 88% of employers acknowledge that employees value partnerships with ESG-focused companies.
At Howden, we are supporting many clients to align their global benefits with ESG principles, reflecting their commitment to sustainability and social responsibility.
The global divide in ESG
While the significance of ESG continues to grow, challenges have emerged.
Political shifts, including President Trump’s executive order ending DEI (diversity, equity and inclusion) performance requirements for federal agencies, have contributed to a rollback of some initiatives.
This trend aligns with research from PwC survey, highlighting that only 47% of US boards now include ESG as a regular agenda item, down from 52% last year.
However, the global momentum for ESG remains steadfast.
A BDO survey reveals that 77% of finance leaders plan to maintain or increase sustainability investments in 2025, demonstrating a commitment to sustainable practices despite political fluctuations.
A tailored approach to global fairness
So how do companies align their benefits with ESG globally?
A nuanced and localised approach is needed, as each country has different regulations, cultural expectations and priorities.
For example, while mental health support might resonate strongly in some regions it’s not a consideration in others, similarly, gender reassignment discussions would be regarded as inappropriate in countries such as Saudi Arabia.
To build equitable and effective benefits programmes, employers must evaluate their existing plans, workforce demographics, and regional needs.
Transparency is key to understanding what is appropriate and valued in each location, allowing businesses to implement a globally consistent framework that respects local variations.
This ensures benefits are relevant, culturally sensitive and reflect the organisation's ESG commitments.
Technology, data, and the AI evolution
Technology is a key driver of ESG-aligned benefits, ensuring consistency, equity and cultural sensitivity.
With accurate data, organisations can deliver transparent, accountable solutions, while real-time communication and data-driven tools enhance adaptability to cultural differences, streamlining benefits management.
While AI can be transformative, business must use it with care and focus on automating routine tasks to improve efficiency, while preserving a human touch in areas requiring emotional intelligence, such as employee engagement.
Ensuring robust data protection and ethical oversight is vital to building trust and achieving equitable outcomes.
Navigating the DEI landscape
Culturally appropriate DEI solutions are also important when structuring global benefits.
Insurers are offering a broader range of benefits, such as gender reassignment support, hormone replacement therapy, and infertility treatments, but they won’t be feasible in every region.
In such cases, flexible alternatives like cash benefits can help address varying cultural and legal landscapes while maintaining the organisation’s commitment to DEI.
Transparency and the total value statement
Pay transparency is a driving force behind employee engagement and equity.
Employers should consider introducing total value statements, documents that outline all elements of compensation, including benefits and additional rewards.
When employees see the full picture of their remuneration, it reinforces their sense of value and strengthens their connection to the organisation’s goals.
Partner with experts
Navigating the complexities of global benefits, ESG principles, and evolving regulations requires expert guidance and experienced employee benefits consultants can provide help employers with challenges including:
- Developing ESG-aligned strategies tailored to their organisational goals and workforce needs globally.
- Ensuring compliance with global and local regulations while minimising risk.
- Proactively adapting to trends in employee benefits, ESG, and DEI to stay ahead in the market.
- Designing communication strategies that demonstrate the value and impact of benefits programmes effectively.
Sustainability is not a fleeting trend - it is the future.
Businesses must embrace ESG principles to stay competitive and resilient in an evolving world.
By proactively aligning global benefits with ESG, organisations will build trust, enhance employee engagement, and position themselves as leaders in creating a sustainable and equitable future.
Supplied by REBA Associate Member, Howden Employee Benefits
Howden provides insurance broking, risk management and claims consulting services, globally. We work with clients of all sizes to provide dedicated employee benefits & wellbeing consultancy.
