ESG (environmental, social and governance) is a drum that everyone is now rightly beating. With COP26, sewage leaks and climate change ever-present in news headlines, we could be forgiven for thinking right now that it’s all about the “E”. Well, it isn’t.
Now don’t get me wrong, the “E” is high priority, but an organisation’s social impact and approach to governance also needs to be high on the priority list as each element of ESG relies on the other in order to be truly effective. The five points below highlight just how important a role HR departments can play in an organisation’s ESG credentials.
Working practices have a huge impact on an organisation’s social footprint. An organisation’s approach to issues such as diversity and inclusion, health and wellbeing, flexible working, family rights, annual leave and speaking up all leave an indelible mark on their employees, which is then taken back into the family, the community and society as a whole. Organisations’ reputations often speak for themselves.
HR departments play a key role in ensuring that the right policies are in place to govern all working practices. They are there to provide advice on meeting not just legal obligations, but also on supporting the achievement of an organisation’s goals and ensuring that the organisation does “the right thing”. This means being able to challenge business decisions and playing an integral part in all board decisions.
And of course, environmental matters should be built into all these policies and practices, too.
Diversity and equality
Every part of an organisation should be focused on the importance of diversity, inclusion and equality. HR will however be a key player in areas essential to ensuring diversity, inclusion and equality such as recruitment, promotion and pay, not only promoting diversity from within but also engaging with the local community in furthering social mobility.
HR will also be able to ensure that the right processes are in place to enable wider engagement through building clear diversity and inclusion plans, setting targets and creating appropriate internal working groups and forums.
Remuneration and incentives
Let’s face it, we all know we should do more. However, HR and Reward teams can help with formulating the carrot to really help drive an organisation’s approach to ESG. ESG issues can be built into remuneration and incentive programmes and also appraisal systems to ensure that people are encouraged to do the right thing in the right way.
None of these points matter of course unless the preaching is practised. Training (and proper training, not tick-box exercises) is fundamental to ensuring this all happens. HR will most likely be responsible for learning and development. It goes wider, though; what we learn at work we take into the wider world. Everything from resilience workshops through to technical skills increase an employee’s opportunity to contribute in the workplace and translate into wider societal gains.
Employers hold a lot of data related to the points raised above. This data can be used constructively to identify risk, areas for improvement and help formulate plans to remediate them. Without this data, and HR teams to collate and provide it, ESG programmes will miss the mark.