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HR and L&D leaders call for more engagement in social policy

?Environmental, social and governance (ESG) policies are becoming more important to HR leaders.

A new report by Headspring, the executive joint venture between the Financial Times and IE Business School, found 88% of HR and L&D (learning and development) leaders said they were serious or very serious about ESG.

However, nearly a third (28%) said they did not fully understand their company policy, despite them being the very people who oversee the training and induction of the organisation in ESG policies.

Over half (57%) of leaders said the biggest challenge to ESG success was the lack of clarity around a company’s policy and its wider purpose.

This was down to a lack of consensus on how to measure the impact of policy, particularly when there are no metrics.

Fifty-four per cent also said one of the main challenges was that current ESG introductions into the workplace did not involve ordinary employees and 56% said there was a lack of engagement from senior management.

Almost two-thirds (67%) of the leaders surveyed believe that companies try to do ‘too much with too little’ which impacts sustainability policies overall.

Vlatka Hlupic, author and CEO of The Management Shift Consulting, said HR directors can introduce a new ESG policy by engaging people’s hearts and minds.

“HR should genuinely put people before profit, and as a result profit will increase on a sustainable basis. Leaders should communicate with clarity why this policy is so important for all stakeholders including wider society,” she said.

Consumers and stakeholders are becoming more conscious of business responsibility, which the report argued was why the most popular ESG-related activity was to support charitable projects in the company’s name.

The lowest activities were reducing the company’s carbon footprint and taking better care of employees.

The report recommended measuring policy by analysing the benefits and costs to the company and the benefits and costs to society.

Hlupic also stressed the importance of involving employees and senior management when introducing a new policy.

She added: “HR should create an inclusive, open, transparent culture by making policies a key strategic priority and approaching implementation from top down and bottom up perspective.

“It should also share stories of successful implementation of these policies in other organisations and share research data that shows that ESG policies lead to better outcomes for all stakeholders- organisations that do good do well at the same time.”

Eighty-four per cent of respondents to the survey said they felt their company made a positive contribution to society, with more than half saying their organisation is a ‘force for good.’

The report said the coronavirus crisis could either offer leaders the chance to introduce changes that wouldn’t have otherwise been possible or have created too many barriers for businesses to tackle.

The Developing Sustainable Leadership study from Headspring is made up of the views of more than 350 senior HR and L&D executives from large corporations in Europe and the Middle East.

Further reading:

How can businesses become more sustainable?

Businesses doing more harm than good when trying to help charities

HRD's pocket guide to... sustainable finance

FRC reviews Corporate Governance Code compliance

Calling on CSR to incite international change