ESG "Beyond the Recycling Bin"
WIL Group member Russam hosted their 8th HR Roundtable, "Beyond the Recycling Bin", with guest speaker - who had an insightful conversation with other experts discussing the impact of ESG on your organization. Here are a few of the main talking points from the conversation.
ESG strategy - know your starting point and Board Engagement
We learned that many companies commit to an ESG journey and are proud of the changes they make. Many have done this without truly understanding how they are currently performing against ESG guidelines.
Therefore, it is essential that we establish a structure for internal monitoring and reporting as soon as possible. Collect information from all the relevant parts of your business, so you have the full picture, and ask a senior and experienced person to lead this for you.
Board engagement – creating passion and commitment, not PR Spin.
Leslye Jourdan gave us several examples of the lack of commitment in the boardrooms to ESG and its longer-term value. It is vital that the board is fully engaged to prevent being greenwashed by the C suite. Incentivising has been proven to be the most effective to gain commitment. Therefore, clearly communicating the economic benefits of ESG will inspire board engagement.
The conversation raised many examples of organizations with a great PR story on ESG but with superficial realities. Boards must commit and challenge the companies they serve on their true commitment to ESG.
The S in social got everyone talking at our ESG event last week: Beyond the Recycling Bin, setting achievable goals for your organization.
The "S" in ESG (Environmental, Social and Governance) has been negated. Unlike the environmental and governance, the S (social) is not clearly defined.
The S covers many social factors, including how well a company manages relations with its workforce, how well they attract and retain talent, diversity and inclusion and employee well-being.
During Lockdown, it was clear that social / people were top of the agenda, and some companies were able to support the social more than others.
What is clear is that the S-word is not always considered equal to the E and the G words, but a company needs to recognize that Social is perhaps the most important word. We need to pay more attention to the S in ESG.
ESG – Why governance is your friend.
Corporate governance is about how a company is managed and overseen, which broadly boils down to the accountability and alignment of the company. Unlike environmental or social, governance data has been monitored for a more extended period of time, and the parameters of "good" governance have been far clearly defined. Significant imperial data suggests that the "G" aspect of ESG ultimately yields better corporate returns.
The governance of a company can be measured by code of business conduct, risk and crisis management, supply chain management, tax strategy, materiality, policy influence and impact measurement. Leslye's experience in investment taught her that Governance scores heavily influence private equity decisions. In contrast, shareholders lost half their investment after a major incident with an oil company after a spill highlights the effect of "bad" corporate governance.
Additionally, a company with a solid governance track record benefit from reduced regulatory and legal interventions. When governing bodies trust the company's corporate actions, they are more likely to award them the access, approval, and licenses to afford new business opportunities.
Furthermore, in relation to all the aspects of ESG (Environmental, Social and Governance), government incentive yields the most substantial response from decision-makers. However, these rewards usually benefit companies with higher resources since they are more finance to adjust their practices.
In conclusion, the G in ESG has the greatest measurable return on investment to a corporation, in comparison to the social and environmental aspects, as a positive score attracts investment whilst opening new business opportunities. Additionally, it affects the stakeholder perception meaning that governance is your companion.
Building future generations of leaders with ESG commitments
At our latest HR Roundtable – "Beyond the Recycling Bin – How to set achievable ESG goals for your organization", our guest speaker Leslye Jourdan and other experts in the field had an open dialogue discussing the main ESG related challenges. A topic that was close to many attendees was how to inspire future ESG leaders.
Russam's Richard Bailey stated that the education system could do more to invoke passion in young people from an earlier age. Even simply adding ESG to the curriculum will have exponential future implications. All schools have a role to play in addressing our climate emergency. This will lead to future thought and industry leads with ESG embedded with their identity.
During his final remarks, Jason Atkinsons, Russam's Managing Director, would like more young people to be involved in the event as he would like to hear their opinion first-hand. "From my experience, ESG, especially the environmental aspect, has been drilled in us since we were young. I believe that there is massive frustration with the lack of commitment from the previous generation. Additionally, I find it bizarre that influencers younger than myself, such as Gretta Thunberg, are taking the lead on environmental issues instead of political or business leaders. History has taught us that young people are usually at the forefront of previous social movements. For example, Baby Boomers were the main anti-war movement.
If the pandemic taught us anything is that social issues are a massive concern to the younger generation. Social Media has many negative. However, it allows us to be more aware of injustice at a far more rapid pace than we've ever experienced. The reaction to the main. During the global pandemic, many moments made it evident that social issue is at the heart of the younger generation. Marcus Rashford's lobbying to feed children reiterates that young people with a voice are taking a stand. The pushback from the government was disappointing, but the change from public pressure encouraged hope within me.
Consequently, I believe that young people with a platform are the most influence on the future generation. Those who directly challenge the power at hand on ESG related issues have the most significant impact in building future generations of leaders within this arena. Business leaders can learn from their example as there is seems to little risk in their actions. Young activists who demand action inspire hope."
Russam's network of interim executives can offer you the ESG leadership you need. If you need an ESG consultant, Russam's interim practice is ready to help. Contact Cathy Kay at email@example.com.