The acronym ESG, as it relates to an organisation, provides a strategic framework within which a firm’s directors can assess, or address, its most pertinent risks and opportunities. According to Airswift, a global workforce solutions provider within the science, technology, engineering and mathematics (STEM) niche, matters of ESG can serve to boost operational performance and bring about heightened financial returns for a firm.
However, the principles surrounding ESG have a higher purpose. They encourage a firm’s C-suite and board of directors to view performance over and above the extent to which money is flowing into the company bank account.
In effect, studies show that ESG can bring about marketplace gains related to everything from corporate reputation and brand value. It also extends to customer loyalty, employee retention rates and even investor confidence.
If you’re unsure of how ESG relates to the job search and/or recruitment function, let’s look at three key pointers. First, there’s the people who work at a company. Or, are affected by the company’s impact on society. Then, the planet on which we all live. And third, the profits a company needs to make to remain sustainable.
So, as you set about hiring key individuals for your organisation – and hopefully act in such a way as to keep them happy and retain them productively – you’ll realise that your top talent will demand that ESG practices are being looked at, and improved upon, throughout all your operations on an ongoing basis.
Such individuals will likely ask themselves, before signing any offer of employment (or continuing beyond the year mark), whether your company:
The “e” of ESG stands for the environment. Companies around the world have been measuring their energy and water usage for years. And, lately also the volume of carbon emissions. This is in an attempt to keep their carbon footprint as low as possible.
Instituting environmentally friendly policies and practices (from materials used to the way business is done) is not just a nice-to-have. This is because as many as 85% of consumers will hesitate to purchase unsustainable products or invest in unsustainable services going forward.
The “s” of ESG refers to social matters, and those related to society at large. While this can be a pillar that’s tricky to put a value on, it’s important to remember that:
• Consumers are no longer keen on making purchases from a company that ignores the social implications of their actions.
• The simple act of setting up a forum of communication between staff and employer, or company and society, can assist people to feel heard. This is as regards their rights, sense of inclusion, data privacy and more.
The “g” of ESG refers to governance. This refers to whether a company is run in an ethical fashion or where employees are fairly treated and feel safe. It also references where policies are carried out with a fitting sense of transparency. When customers trust how staff members behave internally and what a firm is offering to market, they will buy from that company more readily. In addition profits will be enhanced and relationships should end up being considerably more long-term in nature.
Some firms are talking about a “sustainability revolution”. This is where a corporate entity can no longer afford to sit back and ignore the ESG agenda. If they do this, they will risk losing market share to their competitors. They could also lose the top talent which they, in fact, need to succeed – when these individuals opt, instead, to work elsewhere.
On the other hand, addressing all of the ESG-related concerns of a company’s staff and customers – by putting a forum in place to gauge their input – means that an organisation is geared up to trade in the marketplace at the highest level, with the best individuals on board, and after scoring the most generous financial input from its investors.
Let’s be clear: with global sustainability assets set to surge to $53 trillion by 2025, and this calibre of investments seeing far superior returns, in comparison to like-for-like non-sustainable counterparts, it has become time for every C-suite director or senior executive, worldwide, to take the matter of ESG on board holistically and in its entirety.
So, when you seek out the recruitment assistance of an executive search firm, that is intent on embedding the highest level of sustainability, coupled with the best-in-class ESG requirements into their client service-level agreements – you’ll be more than clued up on the value that this endeavour will bring to your company in the future.
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