The Growing Role of HR in Navigating the ESG Agenda

by Laura Brennan, Head of HR at Grenke Ireland.

ESG is one of the key acronyms driving corporate behavior today. Standing for Environment, Social and Governance, those organisations embracing a strong, authentic agenda in this space are seeing significant financial and reputational gains. Alongside these gains they are successfully attracting some of the best talent, sourcing investment, and their support of the environment and community in which they operate is providing a strong value proposition and purpose to those already employed by them. ESG is likely to influence and promote ethical corporate behavior for quite some time to come
and the pandemic has only served to push the topic up the agenda for boards and management teams alike.

Investors have come to expect minimum standards. Shareholders want to see strong governance and oversight, they are seeking long term links between compensation and financial performance. Governments and policy makers are setting ESG regulations and they are actively incentivising environmental issues. Customers are also showing increased interest too, looking for authentic action, and rewarding this with their support – even over profit. Employees want a higher purpose, a safe working environment that supports wellbeing and flexibility, and job seekers are looking for socially responsible employers. The stakeholders in the ESG arena are many and far reaching. It is certainly a hot
topic across all industries!

What is the HR perspective on ESG? As partners’ of some of the most Senior Executives on company strategy and organisational design how are they helping to shape and influence the agenda? How is the role of HR growing across this area?

Traditionally the focus for HR has been on the ‘S’ – the social. This historically was the most ‘visible’ initiative. Those actions where quick wins and results could be found in terms of philanthropic, charitable endeavors, linked to employee volunteer hours, to € corporate matching schemes. HR’s impact however in the current climate is increasing and extends well beyond this. Not only is their influence expanded on the ‘S’, their contribution goes far deeper and across all areas of this critical acronym. Savvy HR departments and CHRO’s are leading the way and becoming involved in setting, and achieving the objectives in their organisations ESG agendas and plans. Here are the opportunities for HR to harness, input and influence this agenda:

Environment
Human Resources have a direct, meaningful connection with employees of their business, they play a critical role with respect to engagement. They help leaders translate and support the values of an organisation bringing the culture alive. The HR role is centrally placed to drive the delivery of targets in the ‘E’;

• The review of Travel Management Policies – reduction of emissions through electric        vehicle fleets, remote and hybrid working – considering the environmental impact of reduced time in office. Bike to work schemes.
• Ensuring handbook, policies, values all support the environmental goals of the company.
• Promoting a greener workforce – taking small steps, a move away from paper, no plastic cups, inspiring sustainably, surveying staff, evaluating commitment.
• Setting targets – Considering Climate Champions, Green Teams.

Social
Social, how companies connect with community, customers, clients and the wider society in which they operate. How they ‘pay it forward’, give back to, and assist society around them. Social also encompasses fairness, transparency and cultures. Human Resources can skillfully assist in finding the link between the issues employees care about and what a company can do to support them. A company who gets this bit correct can live and breathe a more authentic culture. Key and growing opportunities for HR include;

•  Involving employees in the discussions and decisions in this area and driving interest, engagement and buy in.
• Diversity and Inclusion – a workplace and culture where diversity is embraced and equality of opportunity is steadfast. Policies from HR should support and underpin an inclusive culture. Code of Conducts etc.
• Data Analytics – HR can and should focus more on data to tell the story, ensuring fair pay, transparency, having leadership on message.
• Supporting employee wellbeing holistically – financial, mental, physical, social wellbeing of staff. Health and Safety.
• Learning and Development – to ensure policies and culture are promoted top to bottom. Aligning goals to ESG.

Governance
Again HR are perfectly placed to help drive the governance agenda and the ethical behavior of a company. While of course the responsibility of Corporate Governance sits firmly with the Board – HR partners and leaders help design policies and processes that outline what ethical means and that tackle unethical practices. Whistleblowing policies and Code of Conducts are key here.

Far greater than ‘code’s, HR’s influence can go well beyond adherence – they can play a key role in building a culture that embraces change and brings out the ‘spirit’ of ethical behavior in everything a Company does.

Human capital is key to ESG – which whilst a relatively new concept – has gathered pace and the opportunity for HR to lead, influence, and become a key lead alongside their Senior Leadership teams is simply wide open.

About the author

Laura Brennan is Head of HR at Grenke Ireland. Grenke offer fast, forward, flexible leasing solutions to SME’s across Ireland. Whether you’re an entrepreneur looking to preserve cashflow or a reseller that values quick decisions, Grenke have simple and attractive finance solutions.