Environmental, Social, and Governance (ESG) policies have taken centre stage in the past decade. Transparency in business and operations, coupled with social and bureaucratic responsibility has become a pillar in many businesses’ core values. Many might question why ESG has only just grown to become part of the corporate agenda – yet findings show that companies with strong ESG credentials also experience faster growth. Not to mention the variety of research cited in the Harvard Business Review which demonstrates that consumers want to buy sustainable products, often willing to pay a premium for them.
Good environmental, social, and corporate governance policies are important to those who work and support these businesses. They empower all stakeholders involved to take ownership for their behaviour.
Environmental
To date, more than one in five of the world’s largest companies have made some form of commitment to achieving net-zero carbon emissions. An often undiscussed facet of carbon emissions lies in the form of embodied carbon – or the carbon footprint of a building/infrastructure project before it becomes operational. In essence, it is derived from the materials required as well as the construction and building process through the project lifecycle of a building.
It is imperative that businesses understand the need to minimise their embodied carbon footprint, largely because it is a sunk cost that is required for every business starting up. There are multiple ways to go about reducing embodied carbon output, with the majority of these focused on conscious decision making and informed choices. Businesses looking to reduce embodied carbon in their projects should begin by minimising the number of materials and products used, by carefully projecting and calculating what is required. On top of that, the materials used must be carefully selected. Enterprises should avoid using high embodied carbon materials such as cement, concrete, and steel, instead opting for rapidly-renewable materials like timber, bamboo, and wool. Using products with a high recycled content is also preferable to knock down the embodied carbon count, through producing less waste and reusing materials wherever possible.
Social
Social policies in the grand scheme of ESG refer to how well an organisation manages its relationships with people, the societies in which it operates and the communities impacted. How can companies and businesses commit to social responsibilities?
Post-pandemic, many businesses have taken the opportunity to refocus on the workplace as a collaborative social hub. A hybrid model encourages people to come to a workplace when they need to collaborate and stay at home if they are required to focus on concentrated tasks. Ensuring that a workplace includes different settings, from quiet zones to breakout areas, supports a variety of working styles and promotes inclusivity in the office space. Employers should also provide training and development opportunities for employees while integrating wellness into the corporate agenda to maintain a healthy work-life balance. Lastly, diversity and inclusion should be of utmost priority in any organisation that seeks to enhance its ESG policies.
Governance
In a recent survey, some 62% of UK consumers indicated that a retailer’s ethics such as paying staff fairly, contributing to the community, or caring about the environment, were more important to them now as a result of the COVID-19 pandemic. The need for fair treatment and governance policies should be clear to corporations now that consumers have spoken with their wallets. The question is how can companies ensure corporate governance?
On a fundamental level, key areas to monitor are freedom of employment and association. Policies that empower employees and give them a voice to provide for checks and balances are generally a good step forward for corporate governance. Building on that, companies must ensure supply chain diversity and work with businesses that have under-represented groups in their supply chain. This extends to fair labour practices in the supply chain, by eradicating child labour and establishing appropriate pay that commensurates with working hours. Businesses should also conduct regular third-party audits of internal business practices, so as to be held accountable for their behaviour and prevent corruption or abuse of power.
Forge Forward With ESG Practices in the Workplace in 2022
Strengthening and reinforcing ESG practice in the workplace benefits everyone. With the goal of building ethical and sustainable businesses for years to come, corporations and organisations must take steps towards fostering ESG in the workplace as we move into 2022.
