ESG: Now is the time to show your true colours
Nash Squared Chief People Officer, Melanie Hayes, looks at why now is the time to focus on your environmental, social and governance credentials, and the benefits of doing so.
ESG has shot up the agenda for businesses, both as a reputational issue and a driver of employee engagement and motivation. It has become a key element of corporate strategy and identity.
Precisely because it is so important, it’s essential that ESG initiatives are authentic rather than a matter of corporate box-ticking. True ESG is not about doing the things you have to do for regulatory or compliance reasons – it’s about the things that no one has asked you to do but you do them anyway because it’s become part of who you are as an organisation.
When you do such things – whether that’s around diversity & inclusion, working practices and flexibility, environment and sustainability – you show your true colours as a business. Because it’s authentic, it’s so much more powerful as a result.
ESG under pressure?
Recently, there has been something of a retrenchment in some respects regarding ESG. Cost of living pressures, high inflation, rising interest rates – all these things are putting pressure on businesses and individuals alike. Understandably in such circumstances, there can be a temptation to cut back the focus and effort around ‘discretionary’ areas like ESG.
For businesses, the environmental and decarbonisation aspects of ESG in particular can come with an upfront cost. Putting these on the backburner becomes more attractive to some.
We have seen this in the public arena too where there has been some push back against green policies that have a cost. For example, London’s ultra-low emission zone (ULEZ) became a significant factor in recent local elections. There is an ongoing question about how much as a society we’re all actually prepared to pay for the low carbon agenda.
Meanwhile, increasing numbers of employers are beginning to take a firmer line on the working model, requiring employees to come into the office a specified number of times a week. There is a good argument for this, as undoubtedly being present with colleagues in the office generally improves collaboration and frequently results in things getting done faster. It also aids on the job learning and strengthens the sense of team culture.
However, I also believe that it’s essential for businesses to retain enough flexibility so that colleagues can find the right balance for themselves individually, enabling them to work to their full potential whilst managing personal responsibilities too. The mandating of office presenteeism should not be pushed too far – there’s a fine line to find, which will vary between each and every organisation depending on the nature of its business, its culture and other factors.
A real return on investment
While the debate about aspects of ESG is understandable and important, we feel strongly as a business that it’s essential to keep investing in and living by the values that ESG represents. There may be an upfront cost – but it’s a bit like investing in improvements to a property: the cost of ownership will fall over time and eventually will pay for itself.
For example, ESG that improves a company’s environmental footprint should create a more sustainable cost base; activities that build inclusion and a stronger team culture are likely to lower recruitment and retention costs and increase productivity.
At Nash Squared, we’ve got a roadmap for the future that we’ve recently reported our progress against in our second Sustainability Report. In it, we give more detail on our low carbon journey and set out how, through a range of measures, we are on track to hit zero scope 1 & 2 carbon emissions (our own direct emissions and those from purchased electricity and other energy) by 2030.
However, we recognise that this is in many ways the ‘easy part’ – it will take much longer (to 2050) to achieve full net zero through eliminating scope 3 emissions (all emissions in our value chain) as well. Achieving this will be a long-term project over the next twenty-five years. It’s important to stay committed to this and recognise that whilst it creates costs, it will also create savings.
But just as important are the people-based activities such as the employee networks that we have developed across the business.
These networks and communities are incredibly important because, if you have mechanisms in place that help to foster an environment that is inclusive and diverse, you’re actually making a positive difference for everyone – because we all have our own characteristics and traits that differ from others and recognising and valuing those different perspectives creates an environment where everyone can thrive.
Once again, setting up networks and building their momentum does require some investment (both financial and in terms of time and resource). This can lead to challenge or questioning from some colleagues who are concerned that too much time or money will be spent on minority groups rather than the whole. You have to challenge yourself – are we spending the right amount of time/money on this? – and also make sure that there is a payoff for everyone.
Make sure everyone is invited to participate in specific activities, for example. Communicate openly, share highlights and successes – make sure everyone feels involved and give them an opportunity to feed back and contribute. You’re likely to find that, gradually, your networks have a magnifying effect and improve inclusion and morale across the board.
Keep aiming higher
Whilst we are pleased about the impact of our ESG strategy, there is always more to do. For example, we recognise that we need to push harder to increase the representation of women at the top end. Although nearly half (43%) of our workforce globally is female, this falls to 36% at senior leader level. So we have recently launched a Women in Leadership programme to try to address this over time.
Prioritising and driving ESG forward is not always easy. It takes determination and faith. You also need to approach it with discipline, running it as a business project in order to move the agenda on and see results.
My advice is - don’t give up on ESG when outside factors make it harder. Show your true colours and keep committed to the values that make you who you are.