HR's Role in Driving a Sustainable Culture

ESG is a framework that helps stakeholders understand how an organisation is managing risks and opportunities related to Environmental, Social, and Governance criteria^[1]. 

^[2]Environmental factors - refer to a company's impact on the natural world, including their use of natural resources, carbon footprint, and waste management practices. 

Social factors - include a company's impact on people, such as their treatment of employees, community engagement, and human rights policies.

Corporate governance - looks at a company's internal management practices, including the composition of their board of directors, executive compensation, and transparency in financial reporting.

By considering ESG factors, companies can improve their long-term sustainability and create positive impact for both their stakeholders and society as a whole. 

‘Businesses that fail to convince workers they are serious about environmental, social and governance issues, are likely to suffer skills shortages and even fail completely, CIPD president Baroness Ruby McGregor-Smith has warned.’^[3]

What can people managers do to drive ESG and sustainability culturally?

First and foremost, HR can lead by example. By implementing sustainable practices within their own departments, such as using energy-efficient lighting and encouraging employees to carshare or use public transportation, HR can demonstrate a commitment to sustainability and inspire other departments to follow suit.

HR can also ensure that the company's ESG goals and objectives are clearly communicated to all employees, including the senior leadership team, to ensure a consistent message and understanding of the company's values. ESG should be a part of the company’s wider business strategy, as such, goals for the business can filter down into employee’s performance objectives^[4], which can then be rewarded. Rewarding employees or stakeholders for positive behaviours relating to ESG and sustainability will engrain the value of such practices^[5]. 

HR can also play a critical role in recruiting and retaining top talent who are passionate about sustainability and ESG issues. By incorporating these values into job descriptions and company culture, HR can attract candidates who share the company's commitment to sustainability. Additionally, developing training programs and mentorship opportunities for employees who want to learn more about sustainability and ESG practices, can increase employee engagement and retention.

To drive cultural change, HR can work with other departments to incorporate sustainability and ESG principles into business operations. For example, partnering with the marketing department can ensure that the company's sustainability initiatives are effectively communicated to customers and stakeholders. Clearly and proactively communicating the company’s message to all stakeholders will display a strong sense of commitment to ESG which will, as a result, attract talent that also focuses on the issue. 

Another important role for HR is to develop metrics and performance indicators^[6] to track the company's progress on sustainability and ESG goals. By establishing clear targets and measuring progress over time, help can be provided to identify areas for improvement and celebrate successes within the company. This can also help to build credibility and trust with stakeholders who are increasingly focused on ESG performance. 

The CIPD suggest using some of the below data tools:

·       CEO reporting

·       Gender Pay Gap reporting

·       Data on sickness absence

·       Feedback from training events

·       Stakeholder engagement

·       Measuring diversity and equality through equal opportunities forms

·       Electricity usage

·       Waste generated. 

By gathering evidence and data, HR teams can determine if positive action is working effectively or if alterations need to be made to achieve goals. 

HR plays a crucial role in driving sustainability and ESG culture within organisations. By incorporating ESG practices into business operations, recruiting and retaining passionate top talent, and developing metrics to track progress, HR can help to ensure that sustainability and ESG are central to the company's values and operations.

If you need any help supporting employees, creating a culture of support or managing sustainability in the workplace, please contact a member of the ViewHR team.