"Sustainability goals are an increasing focus in governance in New Zealand and around the world, embedding sustainability goals into culture is where HR can make a difference, here’s the why and how." - Steffan Brunner, Associate Director and Leadership Development Practice Lead
Why Is HR Responsible for Sustainability in the Future of Work?
HR leaders are uniquely positioned to steer their organisations in the direction of net zero readiness. Functionally, they’re responsible for the critical areas of hiring and developing talent, including for key leadership roles where new skills are needed; designing policies and benefits, which can impact companies’ carbon footprints; and stewarding culture and values that support sustainability commitments.
HR has a lot on their plate already—but failing to take responsibility for sustainability is a mistake that organisations cannot afford.
Why Are Sustainability Strategies Beneficial?
Given the stakes and urgency of environmental sustainability, there is no question of if your organisation should adapt.
Companies that are swift to deploy a sustainability strategy than regulators and competitors can expect many commercial benefits—particularly in talent development, meeting consumer demand, and delivering value to shareholders.
- Talent Advantage
Organisations that satisfy younger employees’ sustainability commitment expectations will enjoy the security of a strong leadership pipeline, the benefits of generational diversity, and, of course, reduced friction in recruitment efforts.
According to a recent Capterra study, 88% of consumers have checked the sustainability of a product before purchasing it.
Businesses with good sustainability practices have a competitive advantage with consumers. According to a recent Capterra study, 88% of consumers have checked the sustainability of a product before purchasing it.
Long-term Shareholder Value.
Business models that don’t take sustainability into account will not be legal or financially viable forever. An organization cannot ignore sustainable practices if they hope to maintain profitability and ensure long-term shareholder value. Decarbonization, like any transition, has costs. But forward-thinking business plans can spread them over fiscal periods to keep profits strong and shareholders optimistic.
What HR Sustainability Initiatives Can Make a Difference?
1. Hire and develop leaders and employees with skills needed to reach targets and transform your organisation.
Halving emissions requires that organisations go beyond renewable energy credit and carbon offset programs to actually evolving fundamental operating principles.
2. Foster a culture that empowers employees to design comprehensive sustainability strategies.
If an organisation wants to change the way things are done, it must create an environment that is psychologically safe. Employees must feel comfortable and even emboldened to challenge entrenched processes and question the status quo. HR can equip leaders to encourage truth-telling and open-mindedness, which helps build the type of culture that pays dividends in innovation.
3. Design policies and benefits that create consistency and accountability to deliver sustainability goals.
The HR role in sustainability includes embedding and reinforcing sustainability efforts in several lasting ways across the workforce:
- Comprehensive safety policies. A truly comprehensive safety strategy considers both the short- and long-term health risks of failing to care adequately for our environment. By including environmental harm reduction metrics in safety goals, HR can help prioritise sustainable practices on frontline business operations.
- Work-from-anywhere policies. Employee commute emissions are part of the tricky Scope 3 emissions category that is notoriously difficult for businesses to calculate or influence. HR is in the unique position to enable employees to work remotely and travel less, helping cut greenhouse gas emissions that your company is accountable for as part of their indirect value chain. For employees who need to commute, consider creative benefits like incentives to use ride sharing, public transport, or bicycles.
- Fair and distributed compensation. Paying employees fairly and adequately for their contributions helps to build economic equity, which gives people financial means to make environmentally friendly consumer decisions. Fair compensation also allows them to respond to the costs of a warming planet (higher energy bills, preparing for and responding to natural disasters, etc.). This approach can be especially effective when paired with training and education on “green” lifestyles.
- Social impact retirement (or pension) funds. Recent figures show that, in the U.S., “just 2.9 percent of 401(k) plans have even a single fund dedicated to environmental, social, and governance issues, according to the Plan Sponsor Council of America’s most recent member survey.” As the customers of these plan providers, HR has enormous power to influence which funds are chosen for investment. Ensure that socially conscious funds are chosen.
- Sustainability incentives. Consider sustainability goals when evaluating and rewarding senior executives’ performance.