Sustainability is a Talent Issue

Leaders wanting to make progress on their organization’s sustainability goals should look to human resources.

Research by the Institute for Corporate Productivity (i4cp), a global human capital research firm, found that organizations that make progress on their sustainability commitments are far more likely to have HR leaders who are highly involved in designing the strategy for social goals and programs and governance and environmental ones as well.

The study included survey data representing 191 business and HR leaders from 20 countries and explored HR’s role in organizations’ environmental, social, and governance (ESG) programs.

Among those reporting that their organizations are making progress on ESG goals, 79% said HR is highly involved in designing strategy for social goals and programs, 29% reported HR is highly involved in governance goals and programs, and 18% said HR is highly involved in environmental goals and programs.

The data found that organizations with solid market performance were far more likely to have a cross-functional team or group overseeing ESG and HR. Most respondents who reported that their organizations have been making major progress on their ESG commitments in the past two years have cross-functional teams that include HR, sustainability officers, legal counsel, and public or corporate affairs. For example, at Citi, the head of HR is part of an executive leadership team that drives the company’s ESG strategy.

“Given the labor market, and being the global bank that we are, it’s really important for us to think about human capital interests as part of our ESG strategy,” said Sam Santos, Citi’s Head of Diversity and Inclusion Strategy.

Having a diverse and inclusive global workforce is an important goal for Citi, so much so that they met their three-year aspirational representation goals and recently announced new ones.

And ESG goals are intertwined throughout other HR functions. For example, diversity, equity, and inclusion, including representation of women and racial and ethnic minorities at the managing director level, are part of senior executive performance management scorecards. This ensures that leaders are held accountable for making efforts toward diversity, equity, and inclusion, and other related ESG goals.

i4cp’s research identified specific workforce strategies that were significantly more likely to be adopted by organizations reporting making major progress on their ESG goals. These involve:

• Including information about ESG commitments in onboarding materials
• Providing compensation programs that incentivize progress on ESG commitments
• Offering trainings to reduce waste and /or save energy and resources
• Providing training to employees about policies such as anti-corruption or anti-harassment
• Providing training to employees to reduce bias and microaggressions
• Supporting employee resource groups/business resource groups) related to ESG
• Offering elective discounts or benefits that promote certain ESG-supporting behaviors, such as subsidies to purchase electric cars, or paid leave to volunteer in the community
• Organizing volunteer events that support ESG goals
• Providing leadership development that promotes behaviors aligned to ESG goals

Among these strategies, involvement on the part of the learning and development team is clearly critical to help organizations make progress on their sustainability commitments.

An example of this from Citi is its Owning My Success (OMS) program, which provides mentoring and development to Black colleagues. The program provides participants with exposure to Citi’s senior leadership and supports professional and personal development. Over the course of several months, participants join group coaching circles, led by an external executive coach and a senior leader at Citi. Managers also take part in group coach­ing to better understand the experience of Black colleagues in the workplace. More than 700 Black leaders have participated in OMS since the program began in 2018, and the company recently promoted one of the largest and most diverse managing director classes in recent history.

“We have this wide range of stakeholders across the organization involved in our ESG efforts and HR is one of them. We engage our employees as part of this. We use the voice of our employees from surveys and our affinity networks are groups that are heavily involved as well. If you think about social change and how we can improve the environment, it’s through our own employees,” Santos said. “They further these initiatives.”

Click here to read i4cp’s full research paper.