The Value of an ESG Strategy
Why ESG needs to be tied to your corporate strategy to help your business succeed.
An ESG Strategy
Many organizations are implementing an ESG strategy to bring key value to their business. These initiatives can bring a business overall growth, cost reductions, improved productivity, and asset optimization. So, let’s break down what ESG means…
E- Environmental
Environmental criteria include the energy your company uses, pollution, and how a company is managing certain risks around climate change and carbon emissions.
S- Social
Social criteria look at how a company treats people and communities. It can concentrate on, inclusion and diversity, health and safety and working conditions.
G- Governance
Lastly, Governance looks at the practices, controls, and procedures a company adopts and follows to govern itself.
Top of Mind
ESG has risen to the top of business leaders’ minds and has become a core part of their business strategy. VMware’s Digital Frontiers research shows that it’s on the mind of consumers as well, while investors today increasingly consider ESG measurements and ratings when making decisions, recognizing the impact it can have on company performance and growth opportunity.
However, despite its critical importance, for many, there is a need for clarity. Questions arise as organizations look to translate their vision for ESG into a tangible strategy. What you ‘should’ do, what you need to prioritize and why, and how you can do what’s most important – are just some of them.
At a recent GDS Group HR Digital Summit, the SVP of People at S&P Global, Girish Ganesen spoke a lot about the importance of ESG and how it needs to be tied to your corporate strategy. “Be brilliant at the basics. Create a sense of purpose for the business that fosters ESG development with top management buy-in.” While this may be easier said than done, Girish highlighted the importance of looking at the top issues. “Figure out top priority issues that make the greatest impact for the business then you can tie the brand to it internally.” He also mentioned it’s important to have senior leaders aligned with your initiatives.
“Senior management needs to understand value and relevance of ESG to the business because their support is fundamental to nurturing.”
Girish Ganesen, SVP of People, S&P Global
Attracting Millennials & GenZ
ESG performance will become more important to attracting and retaining talent such as Millennials and GenZ. One study reveals that by 2029, the Millennial and Gen Z generations will make up 72% of the world’s workforce (Marsh McLennan). These generations place a lot of importance on environmental and social concerns - and many want to work for a company that cares about the same things. In fact, the World Economic Forum’s Global Risks Report found that 48% of millennials are speaking up to support or criticize their employer’s actions on societal issues and nearly 40% of the generation has accepted a job offer over another because that company was environmentally sustainable.
Diving into DEI
Finally, let’s dive into a company’s impact on the workforce as it relates to wider community issues including diversity, gender equality and employee rights. About 95% of organizations took up DEI initiatives with HR leaders taking steps to: provide inclusion training to managers and employees, track and report DEI metrics and establish diverse project teams throughout the organization according to the McLean & Company’s 2021 HR Trends Report. However, while most organizations made diversity a top priority, the study found that only 38% of organizations have a DEI strategy. So, do you have a strategy in place? Girish also spoke about diversity and inclusion in the recent GDS HR Summit. “Some of the accountability driven around diversity and inclusion practices include having an inclusion index in your employee engagement survey on how your employees feel on how inclusive the environment is.” He said that many organizations are in a race to increase workforce representation, but you can’t forget to double down on intentional inclusion because without that diversity won’t sustain itself.
“If inclusion exists diversity will come.”
Girish advised to prioritize inclusion and actively measure it often. So, what ESG initiatives are you prioritizing at your organization? How are you tying it back to your corporate strategy? Join the discussion at one of our GDS Summits.
GDS Summits are tailored 3-day virtual event conferences that bring together business leaders and solution providers to accelerate sales cycles, industry conversations and outcomes. Regarding the HR Digital Summit 88% of Delegates said the overall experience of the Digital Summit they attended was either Above Average or Excellent and 100% of Delegates said the Digital Summit provided them with actionable outcomes to support their current initiatives.
For more, click here to hear from attendees on how GDS has helped them to achieve their business outcomes.
Continue the debate at GDS’ HR Summits where we bring together senior human resources executives who are actively seeking to share, learn, engage, and find the best solutions.
