HR professionals can play a critical role in shaping and implementing their organisation’s environmental, social and governance (ESG) strategy, which is becoming increasingly important to employees and job candidates.
Justine Sacarello, UK Legal ESG Lead at professional services firm KPMG Law, told attendees at last month’s People in Law Conference that HR teams can add enormous value to their firm’s ESG strategy. This will deliver potential benefits for talent attraction and retention, value preservation and mindset change, as well as being the “right thing to do”.
HR teams have particular influence over the ‘social’ part of ESG, which she said has grown in importance since the Covid-19 pandemic and geo-political disruptive events like Russia’s invasion of Ukraine.
“We saw that companies with a strong culture and those that were purpose-driven were more resilient, and they were able to much more easily migrate to home working [during the pandemic],” Sacarello said.
Other ESG values – including caring about each other, retaining jobs, operational agility and prioritising health and safety – became more critical for businesses during the pandemic.
Societal movements such as #MeToo and Black Lives Matter also engaged more people in how companies and governments operate, she added.
Sacarello warned that HR professionals may encounter barriers when trying to get ESG higher up their firm’s agendas. She said they should consider adding “prosperity” as another pillar of their strategy. For example, greater social inclusion and innovation can deliver economic value to shareholders. “ESG requires an entire mindset shift. It’s very different from other transformation programmes, and will require training,” she said. “I’m well aware that some firms don’t buy into ESG, and your C-suite might not be happy to invest in transition unless there are also obvious opportunities .”
HR should also consider whether employment contracts or HR policies need to be adapted in line with a firm’s ESG strategy. Justine gave the example of KPMG Law’s office space booking system where employees must disclose how they will travel to work if they wish to book a desk. This helps the company report on its emissions.
Sacarello gave examples of where HR professionals can add value to their firm’s ESG strategy, including:
- Helping the workforce to build the skills and capabilities needed to meet the needs of today and tomorrow
- Reward and performance
- Creating diverse, inclusive and equitable environments
- Providing access to health support and reducing work-related injury
- HR reporting
- Encouraging financial and non-financial societal and individual contribution
- Operating an ethical and responsible environment without corruption.
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