The key to ESG: your people
Updated: Dec 2, 2021
One of my standout observations from working with clients this year at The Bridge is that your people are either the key to a successful strategy, or the roadblock of inaction.
It doesn’t matter what your intentions are, or how impressive your marketing proposals might look - if your people aren’t walking the walk on sustainability and broader outcomes, you won’t generate a net positive impact.
A recent JLL survey of 1,200 employees across six countries in Asia Pacific showed that 65 percent are not aware of their companies’ carbon reduction goals, while 60 percent didn’t feel involved in green initiatives.
In this era of the great resignation, organisations are looking for novel ways to increase employee engagement. We think that engaging and empowering more of your workforce around ESG and sustainability is the key. Your people are looking for a much greater sense of purpose in their roles.
Here are our top five tips for empowering your people to become more engaged with your sustainability goals:
1. Responsibility - who should it lie with?
Most organisations we talk to are still grappling with who should be responsible for sustainability and ESG - should they create a new sustainability manager role? If so, where should that sit within the organisation? Should the responsibility sit within marketing; sales; or operations?
Our view is that a senior executive on your existing leadership team must have responsibility for your overall programme. Ideally that person is your Chief Financial Officer in order to give this the right P&L focus and, importantly, the ability to track and measure progress over time. Otherwise the Chief Operating Officer is a good option.
We recommend appointing an overall programme sponsor for sustainability/ESG/broader outcomes at the ELT level. It’s critical to then appoint a number of delivery champions across the key areas of your business.
2. Delivery champions – are they aligned with your business model?
The ideal approach is to have delivery champions appointed across your business model. For example, if you are a construction business, do you have delivery champions in place in pre-construction, supply chain and project management that can identify ways to change what you do to deliver better outcomes. If you are in professional services, your key advisory leaders in different service lines should be responsible, rather than just leaving it to a separate sustainability advisory team, or a special project team. If you are in healthcare, your product development teams and clinical technical leads should be delivery champions who look for innovative, better ways of developing products or delivering services.
Key questions to ask: what does your business model look like? Where does the majority of your revenue generation lie? Is your business shifting to become more outcomes-centric over time?
3. Leadership – is it meaningful?
Our friend Adrienne Miller at ISC often speaks about the importance of treating sustainability as a leadership competency. We love this and still don’t think organisations are going far enough to instill sustainability as one of the core competencies that leadership and management are measured on.
Key questions to ask: Do you have sustainability/ESG outcomes as a core competency? Do you have KPIs and incentives in place that encourage your relevant managers to focus on better outcomes, ESG objectives, or even collaboration with third parties and innovation?
4. Collaboration – do you have an agreed framework?
Does your organisation have an agreed framework for idea generation and collaboration across teams and divisions? Is this an established and natural activity in your day-to-day business activities? This is often an issue where we find organisations don't really know how to act differently, or cut across siloed parts of the business.
Another area that organisations don’t often look hard enough at is proactive collaboration with your clients and key suppliers to generate better solutions for sustainability and wider social outcomes. Are your people empowered to do this and how would they go about that?
5. It’s a transformation – what could go wrong?
Lastly, if done right, we are talking about an actual transformation of mindsets and action to a more outcomes-centric business. Here is a classic article that identifies some of the key pitfalls as to why transformation efforts fail.
When the tipping point becomes the crunch point…
We say that 2021 was the tipping point where ESG and broader outcomes considerations became an imperative for all organisations to take action on. As we head into the end of the year, we see 2022 being the crunch point that will clearly separate those that have an actionable, people-led strategy on ESG from those that do not.
Are you on the right side of this?