This year’s HR Most Influential (HRMI) survey found that there was a strong view that responsibility for environmental, social and corporate governance (ESG) sits with everyone in the business – but that HR has a vital role to play, alongside leadership as supporter, partner and educator.
Approximately 65% of survey respondents said their organisation had a formal strategy for improving performance on ESG/sustainability.
In most cases, it appeared that this strategy was being driven either by the board or some kind of central ESG function.
HR practitioners were, however, playing a key role in supporting the strategy from a people perspective, with a particular focus on inclusion and diversity, working conditions, fair pay, wellbeing and ethical business practice.
Read more: How can HR introduce more environmentally friendly benefits?
“Sustainability, ESG and helping businesses go net zero are now crucial components of business and people strategies,” said one respondent.
“HR needs to be at the decision-making table and influence from there,” said another.
“To make HR the ‘owner’ would run the risk of these important topics being ‘HR projects’. ESG/sustainability needs to be a belief system and not just a process.”
Educating the workforce
Survey respondents also felt HR had an important role to play in educating the workforce, with 52% saying leadership development on ESG/sustainability was being offered across the business.
“HR can help people unlock their understanding of how to embed this in day-to-day work”, and “HR has a key role in the education of the workforce, to ensure they understand ESG/sustainability and the impact of their decisions,” were among the comments.
There was a recognition among HR professionals that a focus on ESG could be a competitive advantage when it comes to recruitment, retention and brand reputation.
Employees were increasingly looking for organisations that support this agenda, and were voicing a desire to work for companies with strong values and a proactive commitment to fighting issues such as climate change and inequality.
“Ultimately, people are voting with their feet and basing consumer and employment decisions on the sustainability actions of companies,” said one respondent.
Developing sustainable leaders
It is good to see this growing recognition among HR professionals of the important role they have to play in both championing and supporting ESG efforts.
At Hult International Business School, we have been conducting research specifically into how leadership roles need to change in response to the critical environmental, social and human rights challenges facing us all.
Our findings underline the need for innovative learning and development interventions to help leaders, managers and future talent navigate the sustainability transitions that are happening right now.
Building literacy on sustainability and ESG issues is of course an important starting point, but our research suggests that first hand experiences are at the heart of what it takes for leaders to build the emotional connection and commitment to put the sustainability agenda front and centre in their work.
For the leaders interviewed in our study, this might have meant experiences such as engaging with people living in poverty, personal experience of the impact of climate change, or experience of the changing interests of key partners and stakeholders.
Influential mentors and participation in professional networks focused on ESG had also been formative experiences for many of our interviewees.
This has implications for the design of learning and development, as well as for the way HR approaches the wider task of managing talent and succession planning programmes.
Leadership development activities need to be structured to create opportunities for current and future senior leaders to have precisely these kinds of personal, first-hand experiences, through powerful experiential learning.
HR professionals also need to value these kinds of life experiences when making decisions about recruitment, career development and succession planning, and make sure they are embedded in the HR processes that underpin these.
As one survey respondent said: “It’s time for HR to contribute and view this as an opportunity to strengthen a purpose-led EVP just as much as an opportunity to help save our planet.”
The next stage of our research will look at the evolving role of HR in sustainability, surveying what kinds of activities HR departments are increasingly engaging in in relation to sustainability and ESG, and what they are learning about what works.
Matt Gitsham is director of the sustainability research lab at Hult International Business School.
This article first appeared in the July/August 2023 print issue. Subscribe today to have all our latest articles delivered right to your desk.