Customers and shareholders are no longer interested in profits and products alone. They also want to know they are dealing with an Environmentally and Socially responsible company, with good Governance processes in place. That is to say, a company that is not only measuring its ESG credentials, but actually making progress against them.
As ESG reporting becomes increasingly mandatory in the UK, finance, risk and HR are having to collaborate to ensure the right things are being measured and managed. For example, it’s no good just measuring gender pay gaps if the underlying barriers preventing women progressing into senior roles aren’t being measured. Benchmarking how ethical investments are will be futile, if the pay and reward driving investment behaviour isn’t also reviewed.
All of which means the bottom line is evolving to include people and purpose, as well as profit. This is a topic we will be exploring further on Thursday 26 May, when Dermot Murnaghan facilitates our roundtable event on redefining the bottom line. Employers including Experian, Calor, Nokia, Savills and Siemens Energy will discuss their experiences of putting people and purpose at the heart of their ESG transformation and growth agendas.
One area we will be exploring is driving ESG transformation through people and the importance of retaining and attracting the right talent to drive transformation.
Once the preserve of HR, attracting and retaining the right talent is now a board-level priority, with employees no longer motivated by pay and benefits alone. They want to work for a fair and equitable employer who is socially responsible and cares about their wellbeing.
All of which means the days of ‘greenwashing’ – when a company could get away with saying one thing and doing another – are over. It’s essential to not only act and behave in environmentally and socially responsible ways, but also extend this to looking after employees, with measures in place to determine and report on progress.
Another area to be explored is the opportunity for HR, risk and finance to work more collaboratively to create more nuanced solutions to emerging risks.
Rising inflation, for example, will not only impact on ESG targets, but also the financial health of employees, pushing many employees below the minimum living standard and making them consider leaving for a pay rise. HR might be tempted to increase pay, while finance will want to keep costs down and risk teams to focus on protecting capital reserves.
This tension is actually a good thing, leading to more nuanced conversations about how best to help employees with the increased cost of living. So we will be exploring how HR, finance and risk can work together to mitigate emerging people risks.
The last area we will be looking at is the risk and opportunities associated with change. Employees are all too often expected to adapt, with a little more thought, most change could be delivered in ways that enhance the employee experience.
For example, the shift towards homeworking was primarily focused on giving people remote access to their work with little or no thought given to how to use technology to better connect employees with each other and the organisation’s purpose. Let alone how to mitigate increased risk of musculoskeletal and mental health issues when homeworking.
That’s why our event will look at both the opportunities and risks posed by the way the workplace is rapidly transforming. Including how to redefine the bottom line, to focus on people, purpose and profits, driving growth and ESG agendas.
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