• Mel Newton, Partner |
6 min read

The ESG agenda is moving quickly, with legislation, market developments and net zero announcements becoming a daily occurrence.  Everyone is recognising that ESG needs to be embedded in an organisation’s strategy and form part of the overall narrative of the organisation.  Core to this is ensuring that every aspect of your people strategy is linked to delivering the ESG agenda, from encouraging behaviours, to limiting the environmental impact of employee benefits. 

In leading the People Strategy, HR have a fundamental part to play in the ESG agenda.

“We must deliver a culture and environment internally which is totally congruent with our external ambitions”

We recently ran a roundtable, to discuss what HR and People functions should be thinking about in relation to ESG. It was co-chaired with Andrew MacLean and Naomi Lever from Standard Chartered Bank’s (SCB) People team, who have been carving out a path on the ESG agenda. 

Naomi was recently appointed full-time to lead ESG in the People agenda and shares an overview of what hooked her interest in ESG, whilst also providing some insights into what SCB are doing on the People Agenda in relation to ESG:

“Having been a HR generalist for virtually all of my HR career, it has been really exciting to take on this unique role as Head, Sustainability, People Transformation. I have been able to build on the knowledge I have accumulated in my time with SCB in terms of understanding our business strategy and HR processes, coupled with a huge passion that I have always had for sustainability, both in terms of the environment and community. Having lived in the UAE, Singapore and the UK, this has also given me insight into the fact that different countries are at different stages of this journey and how crucial this is as we try to engage with a global workforce on a topic like sustainability.

Working in partnership with our HR specialist teams has been a refreshing way to re-look at all aspects of HR with an enhanced sustainability lens. I have been overwhelmed by the levels of enthusiasm from all my HR colleagues, coupled with a desire to learn more about sustainability and the role that HR can play.

What has stayed with me after today’s roundtable was the reinforcement of the view that to be able to achieve our ambition to be the most sustainable and responsible bank, we must deliver a culture and environment internally which is totally congruent with our external ambitions. This becomes especially true as we hire younger generations for whom an organisation with a sense of purpose has become a “must have” rather than a “nice to have”.

Enhancing the sustainability lens

We were also joined by Elizabeth Rankin, Lucy Pringle and Antoine Ribuot from KPMG’s People Consulting team. They shared their views on compensation and benefits, employee experience and reskilling:

1. Compensation & benefits

The reward strategy and philosophy of any business is a key aspect in attracting, retaining and motivating your talent, but it can also be used to drive the right behaviours, create a strong culture and align your people with strategic objectives, which includes supporting and underpinning your corporate ESG strategy.

By the end of the decade, Millennials and Gen Z will make up 72 percent (ESG as a Workforce Strategy) of the workforce and these generations place a much greater importance on ESG. This shows that creating a unique and compelling employee value proposition which has ESG embedded across the whole proposition is vital for attracting and retaining the best talent now, but also in the future.  

Linking performance related pay, such as long term incentive plans, to ESG strategy, can encourage executives to drive the right behaviours, create that ESG aligned culture from the top down, but also make sure that they personally consider the ESG impact of any decisions they make. What measures a company will choose to include in these incentive plans will vary between sector and what the individual priorities are, but we see that the most common measure for annual bonuses focusing on the Social element of ESG, which include areas such employee engagement and health & safety. 

There are a wealth of benefits which can be provided to encourage employees to do their part to create a community ready for change. Some questions to ask yourself are:

  • What would improve your employee engagement?
  • What matters to your employees?
  • How are you making them feel connected to the bigger purpose?
  • Are you asking your employees what they want and how effective is your benefits spend in meeting ESG strategy?

Looking to frameworks available, such as the WEF metrics or SASB framework, can also really help companies to independently assess their entire employee value proposition.

2. Employee Experience

ESG is increasingly at the heart of the employee experience agenda. Employees are looking to work for purpose-led companies, and a majority would choose to work for a socially responsible company, even if the salary offered was lower. They also want an employee experience which helps them to personally support the ESG in their role at the company.

Success looks like embedding ESG into the EVP and throughout employee journeys from onboarding, through to progression and promotion, learning and D&I, to signal a true commitment to ESG by starting within.

You can then enhance this by finding ways to empower employees to contribute to the ESG agenda in a simple, fun, easy and social way - without unnecessary process and bureaucracy. Remember to listen, measure, monitor and adapt - you won't get it right first time and being agile is key to success.

3. Reskilling

Access to skilled workers is a key factor in becoming a successful company. To address the skills‑gap challenge, companies must invest more in training and reskilling their workforce. According to the latest World Economic Forum report on Skills, 50 percent of all employees will require significant reskilling by 2025, and 40 percent of current worker’s core skills are expected to change in the next 5 years. That is why your learning strategy will play an increasingly important role in future proofing your workforce.

Your learning strategy should equip your employees with skills to succeed in their current job, but most importantly for their next job. We are seeing a clear trend showing that omnicompetence is increasingly the starting point for any organisation’s skills and capability agenda. These competencies are transferable across job roles and industries. Combining your learning strategy with a proper skills taxonomy is the key to success, as this will help you strategically drive your learning initiatives to ensure you are building the right skills, at the right place and for the right opportunity.

Adopting a growth mindset is a key part of a learning culture transformation. If employees don’t challenge themselves, take risks and invest in their learning, then growth and innovation cannot happen. This can be done through simple actions and initiatives, such as identifying and fostering learning champions, understanding your colleague’s intrinsic motivation, protecting the learning time of your employees and emphasising on social learning.

Do you need help building a culture of sustainability through your people? Get in touch to find out how we can help.