High-trust workplaces will be the most successful at meeting environmental, social, and governance (ESG) goals. Here’s how you can engage your workforce.
Sustainability has become a global business imperative. Nine in 10 (90%) global institutional investors revise their investments when companies do not at least consider ESG criteria, per a recent survey from EY. In a volatile world, business leaders see the need to invest in green energy to future-proof their organizations.
And customers demand more sustainability, too. A recent Deloitte study found that 67% of participants would pay as much as 41% more for a product that was sustainable. The trend was particularly strong with young consumers.
Sustainability is the future of business. To be successful, you are going to need your whole workforce to be engaged and energized to solve problems and find solutions.
A new generation of leaders
To reach climate and sustainability targets, leaders must change. “We’ve always thought about how do we reach these Sustainable Development Goals, but rarely do we talk about the people and the leadership that it requires to reach those goals,” says Tony Bond, chief diversity and innovation officer at Great Place To Work®.
“A leader creates an environment where people can flourish — but there’s also a correlation with great leadership and the ability to lead sustainable development initiatives.”
At the heart of the issue is trust, the core of what Great Place To Work measures via its proprietary survey. If there isn’t trust between employees and leaders, people won’t come forward to address the risks companies face around non-sustainable business practices.
“Who is in the best position to alert leadership of the risk involved in some of the business practices or products that are being made?” Bond asks. “It’s the employee.”
“If we’re not creating a great place to work, how likely is that person to share this information?”
To meet sustainability goals, organizations need leaders who can build trust.
“About 3.4 billion people in the world work somewhere. Wouldn’t it make sense if we started there and if we created this great environment for people where they work?” – Tony Bond, chief diversity and innovation officer, Great Place To Work.
Quickly making change
Companies who can quickly adapt will be in the best position to win amid an energy transition and threats posed by climate change. Our research shows that high-trust workplaces will be much faster than their competition.
At Great Place To Work Certified™ companies, 82% of employees say people in their organization quickly adapt to change. At Asia’s typical workplaces, only 65% said the same.
Some of the biggest drivers of agility come down to an employee’s experience with leaders. When employees say their leaders inspire people to give extra effort, they are 58% more likely to be agile. When leaders have a clear vision for the company, employees are 37% more likely to be agile and 33% more likely when they say managers competently assign tasks and resources.
Clarity unlocks purpose
Effective leadership also ensures that purposeful work drives business success.
In a study with Harvard Business School, Great Place To Work data showed that embracing purpose only led to stronger business performance when employees had clear direction from their leaders. When employees reported meaningful work, and leadership that makes its expectations clear, the companies saw stock market returns that were 6.9% higher than the market.
“This last finding underscores the absolute importance of fostering an effective middle manager layer within firms,” wrote the study’s authors. “Managers who buy into the vision of the company and can make daily decisions that guide the firm in the right direction.”
Great workplaces have leaders who can both set a vision and ensure that middle management throughout the organization can carry their message and empower employees.
Dow Chemical first released their Environmental, Social and Governance (ESG) report, INtersections in 2021, to help all of their stakeholders better understand Dow’s ESG goals and collectively worked towards transparency and accountability within the company. Last year, within the first three days of releasing its second Intersections report, it had more than 1,750 downloads from dow.com, a 6x improvement from the previous year and the webpage had over 5,700 visits, representing nearly a quarter of all traffic to dow.com. The company believes that by communicating its ESG priorities and making it a focus area, it is critical to the company’s growth and their customers’ goals.
At AbbVie, their commitment to the environment includes finding new ways to sustain resources and reduce the impact they have on the environment. The introduction of medicine blister pack bins in offices in Mascot and North Sydney received positive feedback from their employees. Blister packs are made of different materials, including plastic and aluminium, and they cannot be recycled through kerbside recycling. AbbVie’s office-based employees can recycle their blister packs in the office. For non-office-based employees, a list of locations that accept empty blister packs are provided to employees.
At Certified companies, 81% of employees said management has a clear vision for the future of the company, compared to just 66% at typical Asia companies.
Employee resource groups offer innovation
One tool our research has found to be effective for engaging employees on sustainability? Employee resource groups (ERGs).
Members of ERGs are usually highly engaged employees committed to improving the organization and helping to solve business challenges. Our research has found that ERG members at great workplaces are also 30% more likely to have confidence in their executive team than non-members, a key indicator of future success on sustainability goals.
ERG members can also be crucial voices, ensuring that organizations hear from underrepresented demographics when considering their policies. According to the Environmental Protection Agency, crises created by rising global temperatures and environmental hazards will hit socially vulnerable groups the hardest.
Companies that can tap into their ERGs will be able to get valuable insight and context for their sustainability practices, ensuring that their efforts have the desired impact for communities facing the worst consequences of climate change.
Tips for leaders
Want to drive sustainability throughout your organization? Here’s what our data says you can focus on:
1. Focus on clarity.
Make sure your sustainability goals are intrinsically tied to business outcomes and company values. Ask: Where can our organization have the greatest impact? Companies that have clear and effective leadership are seeing that a commitment to purpose drives higher business performance.
2. Involve every employee in sustainability.
ERGs can be helpful partners, providing highly engaged and diverse employee populations to tackle issues across the organization. Can your ERGs do a SWOT analysis of your current sustainability practices or attend leadership meetings on sustainability? Consider making sustainability metrics a KPI for ERG groups.
3. Invest in trust.
By becoming a great workplace, your organization can have a profound impact on employees and the communities where they live and work. If every company in the world offered a high-trust culture, the world could make significant strides toward the 17 Sustainable Development Goals outlined by the United Nations.
“If we’re taking care of people’s well-being in the workplace, that’s a big part of this whole initiative, gender equality, decent work,” Bond says. “About 3.4 billion people in the world work somewhere. Wouldn’t it make sense if we started there and if we created this great environment for people where they work?”
When everyone has a great workplace, the benefits will be felt in many different ways. “Our impact on the external environment, socially and environmentally, can be even greater,” Bond says.
Get more insights
Discover what your employees value about your workplace culture and get the data you need:
greatplacetowork.com.sg/employee-survey/
