The Neuroscience of the 'S' in ESG!

Environmental, Social, and Governance (ESG) criteria have become essential in evaluating the sustainability and societal impact of businesses. While the environmental and governance aspects often receive the most attention, the 'Social' component is equally critical.

'Social', typically refers to an organisation’s values, policies and practices around factors such as human rights, business ethics, diversity and inclusion, supply chain management and the social impact of its operations.

The central question behind the 'S' (Social pillar) is often described as 'how a company manages the key relationships with its workforce, the societies it operates in as well as the political environment'

However, we think using words like 'company' and 'organisation' in place of 'Leader(s)' often allows the brain to assume that the topic is something that 'other' people do ... we often find ourselves starting sentences with 'They Should', which is blame and projection ... this allows us to conceive of 'Social' as a key part of our strategic development plans, without it ever being associated to 'Me' in our mind.

If we recognise the folly of language and how it works neurologically, allowing us to make assumptions and duck responsibility, ownership and accountability, we can update and improve that sentence:

The central question behind the 'S' (Social pillar) refers to 'how each and every leader at every level conducts themselves, and what beliefs they hold, which guide their approach to managing the key relationships with their colleagues, the societies they operate in as well as the political environment...'

Where we concern ourselves with 'relationships', we must naturally turn to brain function as the origin of human conduct (Actions / Reactions - #BTFA).

Delving into the neuroscience behind the social aspects of ESG can provide valuable insights into why they are so vital and how they can be effectively implemented.

The Neuroscience Behind the Social Part of ESG:

1. Empathy and the Social Brain:

The human brain is designed for empathy, with key regions such as the anterior insula and the anterior cingulate cortex (ACC) playing crucial roles. These areas help us understand and share the feelings of others. In a corporate context, understanding the science behind brain function allows leaders to consciously create the conditions in which other brains foster empathy. This can lead to more socially responsible behaviors between individuals in teams and can inform the setting of policies, enhancing the company's root and branch social impact.

2. Social Reward System:

Our brains are wired to seek social rewards. The striatum and the prefrontal cortex (PFC) are involved in processing social rewards, such as recognition, trust, and a sense of belonging. Leaders who prioritise these social aspects within their ESG strategies, (with awareness of brain function 'in mind'), can better design their approaches to capitalise on the brain's natural, evolved functionality, thus creating a more engaged and motivated workforce. This is strategically critical. In the word of 'Big Data', it is increasingly recognised, through ever-larger studies and their associated reports, "an engaged workforce is a productive workforce" and where we find productivity, we find sustainably increased profit / ROI. The science allows leaders to wire a belief into their own brain, that people maximise profit through their every thought, word and deed and this happens in subtle ways, through conduct, relationships, often impacted negatively (stress / increased cortisol) by imposed control, found in process, procedure, technology and control systems.

3. Oxytocin and Social Bonding:

Oxytocin, the hormone associated with social bonding and trust, plays a significant role in forming strong interpersonal connections. In the workplace, initiatives that enhance social interactions and community involvement, i.e. allow people to connect with each other and to a larger purpose, can increase oxytocin levels (trust), fostering a more cohesive and supportive organisational culture.

4. Mirror Neurons and Social Learning:

Mirror neurons, located in the premotor cortex and the inferior parietal lobule, are crucial for social learning and imitation. These neurons enable us to understand and emulate the actions of others, encoding intentions based on gaze direction for example. This is an easier process for the human brain to execute when face to face with others. Such cues are often missed in on-line meetings as the image resolution is inadequate for the brain to receive the required data inputs / sensory stimulus. This once again highlights how the science helps us inform approach and provides 'reasons why' (verifiable facts) all can believe in. Companies that demonstrate social responsibility and ethical behavior (particularly as informed by a working knowledge of brain function) can move beyond the false assumption that they can somehow 'Convince employees' (where this only triggers defensive neurological reactions) and instead, share the knowledge from neuroscience with their employees so all come to understand and share a common belief in what is 'good' [for optimised brain function], so their approach and actions follow. These are the building blocks of a culture of social consciousness... doing what is best for brains.

Practical Applications:

1. Community Engagement:

Ensure that employees feel sufficiently safe, meaning they are managing their lives without high levels of stress. This state of well-being is crucial for them to be willing and psychologically able to participate in community service and social responsibility projects. Engaging in activities that involve helping others activates the brain's empathy and reward systems, fostering a more socially responsible workforce and stronger community ties.

However, the principle that 'charity starts at home' is essential. Just as airlines advise passengers to put on their own oxygen masks before assisting others, our teams must be in optimal mental condition before they can provide meaningful support to others. When our brains are functioning well, we can offer genuine support as teams and groups, having the most positive impact.

It's important to note that if support is offered disingenuously or out of a sense of obligation or fear of repercussions, mirror neurons in others' brains will pick up on these subtle signals. Genuine engagement is key to ensuring that our efforts in community service and social responsibility have the desired positive impact.

2. Inclusive Workplace Culture:

We often hear the call to "foster an inclusive and diverse workplace where every employee feels valued and respected." However, the reality is that many organizations inadvertently and systematically undermine this goal through their leadership styles and judgment mechanisms. These practices have been ingrained over decades and centuries, during a time when neuroscience was not available to inform our understanding, leading to a persistent issue historically referred to as 'Psychological Sclerosis' (Hardening of the attitudes).

To truly foster an inclusive culture, leaders must understand what brains need to survive and adapt. When this understanding becomes common knowledge and informs our approaches, we can create an environment where every employee feels valued. This alignment with the brain's natural inclination towards empathy and social connection enhances social bonding and trust. By addressing the root causes of these issues, we can build a more inclusive and supportive workplace.

3. Social Recognition Programs:

We can choose to implement programs that recognize and reward socially responsible behaviors. Acknowledging employees' contributions to social causes can activate the brain's reward system, reinforcing positive social actions.

However, we must accompany such advice with a word of neurological caution. Reward systems often involve judgment, and where judgments are made by individuals or committees, perceptions of injustice can arise. These perceptions can profoundly impact the thinking of large groups of people, such as a fan base or workforce.

Therefore, leaders must understand how the brain's reward mechanism works if they hope to create methods that effectively increase dopamine, serotonin, and other neurotransmitters associated with feeling positive and motivated. This requires that people genuinely feel recognized and valued. Simply following a process is not enough for the discerning human brain; authentic recognition and value are crucial for fostering motivation and positive social behavior.

4. Ethical Leadership:

To promote ethical leadership that models socially responsible behavior, we must first agree on a definition of 'ethical.' Traditionally, this definition has not required an understanding of brain function to determine what 'good' behavior looks like in terms of conduct and control. However, with advancements in neuroscience allowing us to observe optimal brain function, it becomes necessary to revisit these definitions.

Neuroscience underscores that leaders who demonstrate empathy, fairness, and social consciousness can influence their teams through the mirror neuron system, creating a ripple effect of social responsibility throughout the organization. These leaders' actions, which stem from their beliefs about what constitutes 'good' behavior (such as optimal brain function), are ingrained wiring patterns in the brain.

The concept of #BTFA (Believe-Think-Feel-Act) operates in both directions, AFTB (Act-Feel-Think-Believe), forming a feedback loop full of circular references that we can now better understand. This feedback loop highlights the intricate relationship between our beliefs, thoughts, feelings, and actions in shaping ethical leadership and socially responsible behavior.

Conclusion:

Understanding the neuroscience of the 'Social' part of ESG provides valuable insights into how businesses can foster social responsibility and create a positive impact on society. By leveraging the brain's natural tendencies for empathy, social rewards, and learning, companies can develop strategies that enhance their social performance and contribute to sustainable success. The key is for leaders to understand brain function.

Call to Action:

Begin integrating neuroscience-backed strategies into your ESG initiatives today. Witness the transformative impact on your organisational culture and social responsibility, driving sustainable growth and societal benefit.

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