A guide for HR leaders
20 May 2021
As an HR leader, you understand the risks that could affect your company’s Human Capital value. There is no doubt that Environmental, Social and Governance (ESG) is the biggest overarching trend that is affecting business at present and, if we care to look a bit closer, we see that this, in fact, is no passing trend, but a force that has, for the most part, been simmering under the HR radar for a long time, accelerated by the pandemic, as noted in this recent article in the Mail and Guardian, “pandemic pushes ethical investing onto 2021’s ‘must do’ list”.
To quote the article, “more than a quarter of assets under management globally are now being invested according to environmental (climate change mitigation, energy efficiency, waste management), social (labour standards, human rights, diversity) and governance (board diversity, transparency, closing pay gaps) criteria”. It appears that ESG is here to stay and will not only be a part of business but pretty much dictates how (and if) you do business for the foreseeable future. Your employer brand value is intricately linked to your company’s ESG results and the perception of consumers and clients on how you are faring in this regard, therefore your leadership criteria should be tied to your company ESG targets.
HR could see this as a threat; however, I prefer to see it as an (enormous) opportunity. ESG is an opportunity to create value for your organisation. It is like a beautiful garden that is waiting to grow and seed and will give you many decades of joy, if only you afford it a bit of tender loving care. And who is to do the gardening, you may ask? The answer is an obvious one – the leadership in your company. Providing that you have the correct leaders. Leaders with a sustainability mindset.
We would first need to understand what a sustainability mindset is. A good HR Consultant will endeavour to understand your particular environment and challenges and work with you to design the set of particular behavioural competencies needed for success in your organisation. It is important to first look at your company’s purpose statement and, if needed, redefine this to become part of a new sustainable business environment. Investigate and identify the value system underscoring this purpose. The next step is to decide which behaviours will best drive this value system to fulfil your company’s promise to clients and shareholders for a sustainable future.
These chosen behavioural competencies would have a particular nuance depending on the environment that your organisation operates in, however, there are certain relevant principles that would apply in most companies. In line with this thinking, my colleague, Catherine Librandi developed what she calls a mega competency in order to understand which qualities are needed for a sustainability mindset. Qualities such as ‘being responsible’ ‘ethical’ and ‘long term view’ underscores a sustainability mindset and is absolutely essential to ensure your business’ survival and future success. This mega competency tool is extremely useful, especially when recruiting top tier leaders, but also when assessing your teams to gauge the current ‘sustainability thermometer’ in your business.
If you need help identifying your leadership sustainability challenges, contact a consultant close to you to find out how we can support you.
Because people drive sustainability.
About the Author:
Article written by Leonie Pentz, VP Sustainability and Managing Partner, AIMS International South Africa