Nowadays corporate social responsibility is a prerequisite for most companies if they want to stay competitive. Increasing pressure from legislators and regulatory authorities, investors and employees also contribute to the necessity to create a ‘sustainable’ company. However, this often requires a transition to a new way of operating, where the environmental and societal impact is taken into account. For many companies, the Environmental, Social and Governance (‘ESG’) concept is the guiding design principle.
A company’s ESG strategy affects all parts of the business, thus also the HR function. For example, by setting up your remuneration policy in a certain way, you can actively contribute to operationalizing your ESG strategy and realizing desired goals.
ESG indicators
You can achieve this by having your remuneration packages not only take account of financial, but also (long-term) ESG indicators, such as environmental impact, social justice and sound management. These help in positioning your company as a responsible and ethical organization. They also force directors/managers and employees to commit to creating long-term value for the company.
ESG in personnel policy
Moreover, including ESG criteria in the company’s personnel policy strengthens your image as an attractive employer on the labor market. Green employment conditions, equal pay for equal work, inclusivity and diversity in the workplace, flexibility and social safety are themes that have become increasingly appealing to employees as well as helping to make your company future‑proof.
