Organisations were rated the only trustworthy institution in this year’s Edelman Trust Barometer, creating a unique moment in time for organisations to step up and fill the vacuum left by Media, Government and NGOs.
Within sustainability, the focus has predominately been on the environmental aspect of ESG as it has established targets, regulations, and straightforward measurements. However, organisations now have an increasing responsibility to consider their social impact and create a sustainable future for all of their stakeholders.
During our most recent Future of Work Insights Session, we explored the complexities around the social aspect of ESG and how organisations can leverage the ‘S’ of ESG to their competitive advantage. We identified four areas to consider as you develop your signature approach:
(1) Acknowledge the risk of neglecting the social aspect of ESG to incite action.
In contrast to the environmental aspect of ESG there is no sense of urgency or risk for organisations that fail to invest in their social sustainability. Yet this risk is there. Organisations that fail to act may jeopardise areas including talent attraction and retention, productivity, and people experiences. Acknowledging and communicating this risk to your people is crucial, as it builds a narrative around why change is necessary, and what is at stake if you don’t act.
(2) Build sustainable organisations for the future.
To create a more sustainable future, organisations need to focus on two factors: building sustainable products and sustainable workforces. The social aspect of ESG is how organisations can achieve this; it serves as the catalyst for creating a social strategy that takes your organisation into the future and brings about meaningful changes in the lives of your stakeholders. Measuring and tracking the impacts of your social factors and developing a coordinated response as an HR function can help build compelling personal narratives and take concrete actions in your organisations. These strategies generate tangible value for them in an impactful and measurable manner.
(3) HR leaders can leverage opportunity despite the ambiguity inherent in the ‘S’ of ESG.
The social aspect of ESG is complex and cross-functional, which means initiatives may fall ‘through the cracks’ due to a lack of synchronisation across functions. But there is opportunity within the cracks to create something exciting, powerful, and different to your competitors. HR should be the function to lead on the social aspect of ESG and address these gaps by aligning leadership, leveraging core capabilities, and using your purpose to drive your strategy.
(4) Aim for progress not perfection.
The social aspect of ESG is a dynamic and ongoing process which requires organisations to be bold and proactive with their actions, even if they are small or incremental at first. On this journey organisations need to experiment, collaborate with key stakeholders, and leverage core capabilities to create a sustainable future. No organisation has got this fully right, as this is a journey that requires progress and not perfection.
By actively considering how these key areas can impact your organisation, HR leaders can leverage their expertise and knowledge to help create a sustainable future for all of their stakeholders using the social aspect of ESG as a catalyst.
Download the latest HSM Advisory’s White Paper “Creating a Sustainable Future” here.
Author: Sarah Snyder, Junior Consultant at HSM Advisory