Creating a sustainable culture in the workplace

TECHNOLOGY
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Among the myriad issues that continue to dominate the discussion of sustainable development, the critical link between environmental, social and governance (ESG) and workplace culture seems largely ignored. But this critical connection is a source of individual and community identity, innovation and creativity, and is essential in building social inclusion and economic equality. It also provides economic growth and promotes the idea of ​​ownership within large multinational corporations.

It’s a way for business leaders to focus on what matters most to their employees and communities, transparently measuring their organization’s contribution to sustainable practices.

The implementation of ESG principles has become very important in recent years for several reasons that are valid and essential for the equitable growth of countries and societies as a whole. The challenges of climate change and its negative impact on all sectors of the economy, the growing demand for social justice from all segments of society, the extension and enforcement of human rights by activists, and the need for transparency and accountability by employees for all decisions and actions. Efforts by corporate management and increased scrutiny of companies by regulators have put ESG implementation on the priority list of most companies.

Those who implement ESG principles in their corporate to-do list are the clear winners in the corporate world. In a May 2019 article published in McKinsey Quarterly entitled “5 Ways ESG Creates Value,” authors Witold Henisz, Tim Koller, and Robin Nuttall discuss how ESG can impact cash flow in five important ways. It explains how it affects you. It drives sales growth, reduces costs, minimizes regulatory and legal interventions, increases employee productivity, and optimizes investments and capital expenditures, the authors say.

A strong ESG proposition can help companies open up new markets and expand into existing ones. “When governing authorities trust corporate stakeholders, they are more likely to give them access, approval and licenses that offer new growth opportunities,” the report argues. ESG also helps companies reduce the risk of adverse government action. It can also generate government support.

In addition, companies engaged in social activities are recognized as beneficial by public and social stakeholders.

Companies that implement ESG effectively can help address rising operating costs (such as the cost of raw materials and the actual cost of water and carbon), which can impact operating profits by up to 60%, according to research. there is. It also helps companies attract and retain quality employees, instill a sense of purpose and motivate them, and improve overall productivity.

As many studies show, employee satisfaction is positively correlated with shareholder returns. Recent studies have also shown that positive social impacts correlate with increased job satisfaction. Field experiments suggest that employees respond with enthusiasm when companies “give back.” After all, when employee retention increases and it resonates, a company’s reputation increases and access to capital improves. It also becomes a key driver for sustainable success and competitive advantage and opens a platform for positive dialogue between employers and employees.

Companies are empowering the workplace by adopting Diversity, Equity, and Inclusion (DEI) models, recruiting from diverse talent pools, encouraging sustainability, and restructuring employer policies to focus on ESG. Build an ESG culture. Companies also need to close the gap between executive and employee compensation and provide fairer incentive structures to foster an inclusive culture and employee engagement.

A strong ESG proposal can arguably increase the return on investment by allocating capital to more promising and sustainable opportunities (renewable energy, waste reduction, scrubbers, etc.). Ultimately, investors see value in his ESG. Because ESG is fundamental to its performance and value and should be part of an organization’s business and workplace culture strategy.



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Disclaimer

The above views are the author’s own.



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