What is Environmental, Social and Governance (ESG) in the workplace?
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ESG Policy will cover matters of Environment, Social & Governance.
Environmental, social and governance (ESG) factors are used to measure the culture and values of an organisation beyond its mere financial performance.
What are ESG factors used for?
ESG factors focus mainly on sustainable and ethical impacts. A business’s ESG factors might be used by prospective investors or customers to measure ethical and sustainable values before committing, or, for our purposes, so that existing and prospective employees can think about whether it’s somewhere they want to work, based on whether the organisation reflects their values or can prove that it has its priorities straight.
Should I publish my company’s ESG factors?
As with many employment related concepts, at this stage, publishing ESG information is a pretty familiar sight from large organisations, but it’s growing in importance amongst smaller businesses. To publish ESG information on your website may “tick a box” with potential investors, regulators, and prospective customers, but it will also make you look more attractive and tuned-in to your existing and prospective workforce.
ESG Policies are a relatively new thing to the corporate world.
Do I need an ESG policy?
Having an ESG policy is not mandatory! But, there are good reasons to have one. It’s partly about employee wellness, engagement and retention – attracting people to you as an employer, and once recruited, ensuring they stay. Research has shown that younger employees – Generation Z and Millennials – are particularly aware of and “concerned about the state of the world and actively trying to balance the challenges of their everyday lives with their desire to drive societal change” and are “reassessing their priorities and expecting more from business leaders” (Deloitte Global 2022 Gen Z and Millennial Survey).
Does an ESG policy help Employee Wellbeing?
ESG monitoring in the workplace can massively impact employee wellbeing and retention. Happy employees don’t leave. Indeed, the Deloitte research confirms what many have found: that the upheaval we’ve seen during and since the pandemic has fundamentally altered people’s priorities. We’ve seen the advent of the mass resignation, quiet quitting, hybrid working and demand for better work/life balance taking centre stage. It’s short-sighted to see these developments as simply employees taking and businesses giving. To attract the best workforce, employers need to buy in to establishing and using a variety of tools to help them attract and retain employees and put those employees into a position to perform at their best and most productively – which is ultimately what the business wants.
What should an ESG policy include?
As to what to include in an ESG policy, from an employment perspective, it’s primarily about the social factor. To break it down further, this will be made up of concepts like diversity and inclusion, employee wellbeing, employee engagement, whistleblowing, pay and reward policies, and the impact of the business on the communities it operates in.
Employment Law Solicitor
If you have any queries about ESG, or want information about how you can introduce ESG factors to your existing policies and procedures, just drop us an email at firstname.lastname@example.org and we’ll arrange a free initial chat.
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