Engaging employees around ESG
ESG & employee engagement intersect on multiple levels. One one hand, good ESG performance improves employee engagement and retention, and contributes to a compelling employee value proposition. Conversely, team diversity and engagement metrics are important for ESG reporting — the relationship between employer and employee is one of the most important connections a company has with the community and economy.
An important and challenging facet of the intersection between ESG & employee engagement is engaging employees to achieve ESG compliance, strategy, and innovation. Unlike its predecessor, CSR, ESG is embedded within a company’s operations. This makes ESG more effective for driving organizational change, but it also presents the challenge of how to educate, empower, and inspire employees to incorporate material social and environmental concerns into their work.
From Compliance to Innovation
As any ESG thought piece will tell you, to get real value from ESG, you have to integrate your company’s material concerns into its business model and operations. Publishing an ESG report is good, but developing new product lines that meet consumer demand for sustainability is better. Getting from compliance to innovation is a challenging change management process that starts with securing employee buy-in and ends with them internalizing ESG principles.
Communication
As with any other change management process, change must start from the top. For ESG transformation to take place, company leadership must have a clear vision and goals around its impact and communicate them widely. A unified message will enable priorities to cascade and help break down silos between teams so they can work together towards ESG progress. Taking a stand on social and environmental concerns is also crucial for engaging and retaining your team members — 86% of employees want their employer to share their values.
Education
Developing a common understanding and language around ESG at the outset is crucial, since diverse functions within your company will be involved. Begin with a broad, company-wide training to develop a comprehensive understanding of ESG issues, trends, and common terms, but don’t stop there. Investing in team-specific and skills-based ESG competencies enables employees to achieve discrete functions and also empowers them to take a broader perspective and collaborate with other teams.
Leverage employee groups
Employee groups like ERGs and Green Teams can be great thought partners and resources for ESG advocacy and integration. Get to know your most engaged members and listen to their ideas and critiques. Giving employee groups too much of a role in the planning process, however, will lead to a fragmented and unsustainable strategy, since group leadership is likely to turn over frequently and their core issues will not necessarily align with those of your broader company. Leverage employee groups to improve ESG performance without relying on them for strategic guidance or ideas.
Measure Success
Once your teams are trained up and understand the company’s ESG vision, you can get to work embedding ESG KPIs into each team’s goals and objectives. The KPIs you select will depend on standards’ guidance and the outcomes of your materiality assessment. Have a conversation with each team to invite their insights into the process and ensure they understand who on the team is accountable and how they will track the key indicators. You’ll also want to evaluate the metrics periodically to ensure they remain relevant and decision-useful as your strategy evolves. Finally, embedding financial incentives is a good practice to ensure execution and broadcast seriousness around ESG. 25% of Fortune 500 companies tied leadership remuneration with ESG performance in 2021 — up from 19% in 2019.
Be Consistent
ESG integration is a challenging change management process. Consistent communication is crucial to remind and incentivize team members to integrate environmental and social concerns into their work. Change is hard, and if employees do not receive consistent encouragement around ESG, it will be too easy for them to be complacent. Feature examples of ESG integration and innovation and reward teams that take social and environmental concerns seriously. Finally, since ESG issues are dynamic, you’ll need to remain vigilant around employee up-skilling and measurement as your material topics evolve.
Engaging employees is one of the most challenging aspects of ESG execution, but it's also one of the most rewarding. Intrenched issues like climate change and racial injustice are likely to be big stressors for your workforce. Empowering team members to take positive action on these and other important issues provides a productive outlet for that stress and makes work more purposeful. Plus, you don’t have to do it alone! 😉 I’m offering free, industry-specific employee workshops on ESG for the rest of 2022 and would love to work with you to embed ESG into your employee engagement, learning & rewards processes.
