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The power of pairing ESG and the employee experience

By Megan Leon , Sarah Scalici and Charles Huff | February 23, 2022

The time is now: HR should take the opportunity to connect environmental, social and governance (ESG) to the employee experience (EX).
Medioambiental|Employee Experience|Ukupne nagrade
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Attracting and keeping great talent today means stepping beyond the essentials and doing more. This means clearly articulating purpose and providing inspiration that makes employees want to join, stay and give their best effort to your organization. Recognizing the fundamental relationship between environmental, social and governance (ESG) principles and the employee experience (EX) enables you to forge this essential bond between people and work.

ESG priorities have become increasingly important, not only to board members and executives, but also to how companies define their internal priorities and evaluate corporate behavior. Research shows companies that lead in this space have better financial results. From an EX perspective, the biggest drivers of ESG are employees because they invest their time and energy in your company. That’s why it is critical to demonstrate the ESG commitments you’re making and actions you’re taking to protect the planet, advance social good and support ethical and inclusive practices.

Employees at companies with generous and lasting corporate social responsibility efforts during the pandemic were 15.6 times more likely to say their companies were great places to work. And 61% of 25 to 34-year-old employees highlight sustainability as a key consideration in where they choose to work. This shows that focusing on long-term, sustainable growth provides clear advantages in attracting, engaging and retaining employees.

ESG as an EX differentiator

Improving EX is a top priority for employers. According to the WTW 2021 Employee Experience Survey, 92% of organizations expect to prioritize EX enhancements over the next three years. This figure is up from 52% prior to the pandemic. But, when asked, few have an integrated EX and business strategy or talent priorities that support the business objectives to address the challenges of the way work is done post-pandemic.

It’s critical to connect the dots between your EX strategy, business strategy and ESG initiatives to reinforce the importance of employees’ contributions to your organization.

Fundamentally, employees are seeking connection and meaning through their work. This connection and meaning are what ultimately fuels the employee experience. Applying an ESG lens elevates EX through a strong sense of purpose and pride (i.e., the meaningful work employees do to support ESG priorities, the connections they make to advance ESG goals and the returns employees see as a result). When companies get this right, employees will also:

  • Reap the rewards of feeling more included
  • Feel empowered to share their voice
  • Feel supported in focusing on their wellbeing and so much more

Embedding ESG in your EX

ESG is about more than just metrics related to business performance and investing. It is about:

  • Driving a purposeful employee experience
  • Demonstrating appropriate leader actions
  • Building a positive company image

Companies that embed ESG in their EX will see a return on investment from employees who want to stay and do their best work. They’ll also be able to attract new talent that shares the organization’s values.

Because ESG principles are key to the employee experience, HR plays an essential role in making the connection for people and enabling the organization to act upon its priorities. It’s important to recognize that employees are truly those at the heart of climate and resilience, wellbeing, and diversity, equity and inclusion (DEI) efforts, and are the ones who demonstrate ethical business practices. HR needs to not only ensure plans, programs and business practices align with ESG priorities, but also engage employees to help support efforts.

So, how are you bringing employees along and engaging them in these priorities? Here are five tips to get you started:

  1. 01

    Develop a compelling ESG narrative

    Be bold in defining your commitments, clearly conveying who you are and what you stand for as it relates to the EX. Consider your current ESG strategy, gather employee insights and develop authentic messaging that will resonate with your employees and align with your value proposition.

  2. 02

    Create meaningful connections

    Build awareness around what ESG is, why it’s important and how it impacts what it means to be an employee within your organization. Deliver the ESG story throughout the year and at key moments that matter during an employee’s career from recruitment to retirement.

  3. 03

    Make it real

    Each of your employees is impacted by ESG priorities every day – at work and at home. But psychological distance can hinder ESG communication (i.e., the concepts feel too distant to our work and our problems today). Understand what it takes to make it real enough for your employees to pay attention and get involved.

  4. 04

    Lower the barriers to entry

    Make it easy for employees to participate. Start initiatives that engrain small behavior change into their every day that can be built on over time. These activities could include:

    • Replacing plastic with bamboo utensils in your onsite cafeteria
    • Asking employees to bring their own reusable mugs to the coffee station
    • Offering a sustainability-focused employee resource group
    • Signing climate pledges
    • Removing garbage cans from every desk
    • Activating your DEI and wellbeing strategies
  5. 05

    Sustain the commitment

    Create a long-term emotional connection that’s transparent, honest and “real” for both the employee and organization. Build a plan to:

    • Provide regular updates on progress toward ESG goals/metrics with connections on what it means for employees
    • Organically embed ESG within the culture through ongoing efforts
    • Infuse ESG messaging in all employee communication materials
    • Involve employees and encourage conversations
    • Motivate actions and see results

Final thoughts

In a world that is rapidly changing, it can be difficult for companies to understand emerging trends and risks so that they can identify and prioritize the opportunities that will help them remain competitive for the long-term.

Looking at business strategy through the lens of ESG can not only help you manage near-term risks, but it can also provide a long-term competitive advantage, uncovering opportunities that otherwise could have gone unnoticed. By embedding ESG in your EX, you can differentiate your organization when competing for new talent, inspire your current employees and keep them engaged and ultimately use the power of your workforce to help deliver on your ESG goals.

Authors

Consultant – Employee Experience
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Lead Associate – Employee Experience
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Consultant – Employee Experience
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