This percentage increased by 34% over the past 12 months.
Grid's research, published yesterday (5 November), showed that a similar number of HR professionals (88%) think partnering with companies with a strong ESG policy is important to employees. This increased from 62% in the last 12 months.
“The surge in HR leaders prioritising ESG-aligned benefits providers reflects a fundamental shift in corporate consciousness and employee wellbeing,” said Alex Hind, CEO and co-founder of employee benefits platform Heka, speaking to HR magazine.
Employees increasingly expect their employer to value ESG, according to Kate Palmer, employment services director at HR consultancy Peninsula.
She told HR magazine: “Employees are now not only looking for a job that they enjoy and pays well, they are looking for an employer that values them, has a positive impact on the planet and that operates in an ethical and sustainable manner.
“Given the importance that some employees place on this, some organisations are keen to prioritise ESG in all aspects of their business which includes who they deal with and the suppliers they work with.”
Read more: Can pensions align with ESG goals?
HR leaders should review their own ESG policy against benefits providers’, to ensure they are aligned, said Scott Lane, CEO of ESG software platform Speeki.
He told HR magazine: “Firstly, employers need a clearly defined ESG policy that sets out where and how they can feasibly improve their ESG impact.
"And they need to know exactly what they want to stand for as a company, whether that's being a company that prioritises improving employee wellbeing, having a positive climate impact, or a combination of these and other principles.
"Then they need to review the ESG credentials of benefits providers directly against this policy and their organisation's principles.”
Employers should inform they make data-informed decisions about benefits providers, Katharine Moxham, spokesperson for Grid, added.
Speaking to HR magazine, she said: “Employers can check ESG credentials for their benefits providers in several ways.
“They might have a specialist team in place to evaluate the ESG credentials of an employee benefits partner, or they might check a provider’s published statements on ESG against their own priorities, or they might do so by using a scoring matrix.”
Read more: The new frontier of employee engagement: Personalised benefits
When deciding what benefits to provide, employers should segment their offering while considering ESG, Martin Parish, regional director of employee benefits at insurance company NFP, told HR magazine.
“There is a danger that an employer selects a benefit to enhance ESG credentials but take-up is low and therefore the very selection process used is sub-optimal from an ESG perspective,” he said.
“Segmenting benefits into the E, S and G categories would help employees understand what steps their employer has undertaken in assessing and selecting benefits.
“As an example, pensions have a critical part to play because of the wider role the funds play in global investment markets (environment and governance) but a pension also supports an employees financial wellbeing in later life (social).”
Providing personalised benefits could allow HR to emphasise the social aspect of ESG, Palmer suggested.
She commented: “It is likely that the more personalised and flexible benefit provisions are, the greater help they will be to the workforce. Employees are increasingly looking beyond their pay packet to what else an employer can provide them, and the benefit provision is a key part of this.”
Benefits focused on the environment could also be popular among employees, Hind advised.
“When enhancing ESG strategies through benefits, HR should focus on offerings that create tangible positive impact while fostering a culture of environmental consciousness.
“The most effective approach is curating a benefits package that builds a sense of purpose while delivering measurable ESG outcomes.
“Traditional options like cycle-to-work schemes and electric vehicle salary sacrifice programmes remain valuable, but we're seeing increased demand for benefits that enable sustainable daily choices – from eco-friendly personal care products to services from certified B Corporations.”
Grid commissioned Opinium to survey 500 HR decision-makers in the UK between 9 and 16 January 2024. The research was published on 5 November.
