Could ESG be integrated into business policies?

Environmental, social, and governance (ESG) policies and procedures could become a foundation for future businesses due to the importance of climate change and other timely world issues.

First of all, what is ESG? ESG means using environmental, social and governance factors to assess the sustainability of companies and countries. These three factors are seen as best embodying the three major challenges facing corporations and wider society, now encompassing climate change, human rights and adherence to laws.

HR Leader recently spoke to Lucy Piper, corporate climate expert and director at WorkforClimate, about how organisations may approach ESG going forward and if it could be fully implemented into business policies and procedures.

“I would argue that perhaps it’s more a shift in mindset. And the reason I say that is because I think about that whole digital transformation piece. My experience of being inside of a business throughout that period of time was that you had to really think about what digital transformation meant for you in your role in your team, in your department. It was a shift in mindset; it was a digital-first mindset,” Piper said.

“We have a very helpful template in that digital transformation roadmap. We can take that and apply that to what climate transformation looks like. Climate is a very specific part of a businesses impact and sustainability design.”

Businesses across Australia are already looking to integrate some kind of climate guidelines or policy because society, consumers and employees deem it as a very important issue. This importance drives urgency.

“We have an urgency right now, [within] the next five to 10 years, this window where we have finite carbon budget that we are striving to achieve. Whilst there remains this opportunity, this window, to be able to bring our emissions down fast enough,” Piper said.

“That sustainable business design and how that cascades down through an organisation, through every single pillar of a business strategy, we will definitely move to that world; we will be forced to. The energy transition that we are in the midst of right now is happening. It’s not going anywhere. So, it’s just a case of people picking up momentum internally.”

For organisations to truly capture the potential of that sustainable business design and that shift mindset, leaders have to ensure that it goes company-wide. If it is merely a push from corporate higher-ups and not inclusive to all members of the oraganisation, then it will not be fully capitalised.

For example, if an organisation wants to introduce policies and procedures around environmental practices, then they will need to offer climate engagement training to all members of the organisation.

“Growth and training and upskilling your workforce has a double benefit. The first benefit is when people are green and growing, they are more engaged, they are showing up in healthier, more positive ways. But then the second benefit is the more tangible outcomes that come from their capabilities being improved,” Piper concluded.

“I think that we’re at a point in the journey when it comes to climate training and sustainability training, where we don’t know yet, we don’t know what those outcomes are going to be, because we are right at the start of that journey.”