United Kingdom

From D&I to ESG: Purpose-led actions are increasingly prominent on UK employer agendas

Colin Burnes

According to 46% of respondents to Aon’s UK Benefits and Trends Survey, there is a greater emphasis on Diversity and Inclusion in their workplaces since the COVID-19 pandemic began, while 19% of employers have adopted Environmental, Social and Governance (ESG) policies in their pension strategies.

Our 2021 survey also showed that employers believed both Diversity and Inclusion and environmental and sustainability policies are two of the top four employee expectations. Of the 91% of respondents who believed employees’ expectations of the workplace are changing, the top four expectations were shown as agile and home working (95%), more flexible working hours (93%), a better approach to diversity and inclusion (70%) and environmental and sustainability policies (51%). Other areas where employers believed employees expected change included improved parental policies, access to financial education, volunteering opportunities and better awareness and handling of mental health issues.

Before the pandemic, we were seeing the rise of the purpose-led organisation, which established clear objectives around the environment, sustainability and communities as well as Diversity, Equity and Inclusion. In 2020, as the world responded to COVID-19 as well as the rise of social justice issues, we collectively seemed to become even more aware of global issues, in the communities we live, work and do business.

In terms of DEI and benefits strategy, the survey asked employers to rank objectives important to their organisation, rating from most to least important. In last year’s survey, no employer stated that a Diversity/Multigenerational approach was their most important priority and just 2% ranked it as their second priority. This year, 14% said it’s the most important priority for their organisation, and a further 35% said it was the second-most important priority, showing its increasing importance to employers and their employees.

Additionally, environmental concerns have impacted organisational actions on pension strategies. There has been an increase in employers adopting ESG in the design of pension scheme default investment funds or alternative fund options, from 8% in 2020 to 19% in 2021. There has also been a 7% drop in those stating this is “not being considered”.

This pension funding insight supports the trend Aon is experiencing in the workplace pension market where employers want and need to address ESG within pension scheme strategies. This aims to meet internal policy and employee demand as well as a potential link to wider Corporate Social Responsibility (CSR) policies. Indeed, 75% of respondents said it’s important to align their pension default fund ESG strategy with their wider CSR agenda.

This year’s survey shows that many organisations are responding to the issues we’re experiencing globally, and not only because of essential reactions to the pandemic. The long-tail risk of climate change and a dramatic change in attitude to cultural inequalities have seen organisations reacting to employees’ growing knowledge and demand for ethical services and solutions. ESG and DEI are becoming embedded in employer decision-making.

To learn more about the Aon UK Benefits and Trend Survey 2021 and download the full report visit here.


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