In Singapore, integrating Environmental, Social, and Governance (ESG) principles into corporate practices has gained significant traction, reflecting a growing global emphasis on sustainable business models. Companies in Singapore increasingly recognize the importance of ESG factors in driving long-term value creation and mitigating risks. Recent initiatives among companies and overall trends in the country highlight these efforts.
According to the Singapore Exchange (SGX), ESG reporting among listed companies has steadily increased. In 2021, over 90% of them published sustainability reports 2021, demonstrating a heightened commitment to ESG integration. However, a 2023 survey conducted by Business Times Singapore suggests that ESG priorities may be losing momentum among Singaporeans, indicating potential challenges in maintaining widespread engagement with sustainability initiatives.
Despite this, there is a growing demand for ESG-related talent in Singapore’s job market, reflecting the increasing importance of sustainability in business operations. Randstad Singapore reports a rise in demand for professionals with expertise in ESG practices and sustainability, highlighting the evolving workforce trends towards a greener economy.
Additionally, the Monetary Authority of Singapore (MAS) launched a digital platform to facilitate seamless ESG data collection and access. This development signals the concerted effort to enhance transparency and accountability.
These dynamics illustrate the progress and challenges surrounding ESG integration within Singapore’s corporate landscape, emphasizing the need for continued efforts to promote sustainable business practices and foster broader societal awareness and participation in ESG initiatives.
The connection between purpose; environmental, social, and governance (ESG) factors; employee engagement; and business results.
It may sound almost too good to believe, but there’s a well-established path to enhance employee engagement, elevate financial performance, and contribute positively to our world, all at once.
The cornerstone of achieving these remarkable outcomes lies in directing your attention toward your workplace’s environmental, social, and governance (ESG) factors. ESG represents the environmental, social, and governance impacts stemming from your organization’s activities. Embracing and optimizing ESG practices is the key to realizing these three interconnected objectives.
Understanding ESG: An environmental, social, and governance primer
Investors created the ESG framework as a way to consider factors other than financial return when evaluating potential investments.
Before the creation of ESG, investors had no way to account for externalities — the things that did not cost an organization anything, but had a cost to others. For example, a company’s pollution might not negatively impact its bottom line, but would harm the local community.
Defining the 3 pillars of ESG
From those investing origins, three central factors emerged:
- Environmental– How does an action or choice by an organization use energy and other resources, and in what ways does it create waste?
- Social– How does an action affect people in the broadest, most diverse sense?
- Governance– How are decisions made? Are those decisions honest, ethical, and fair?
As ESG has grown in popularity, this framework has come to describe much of how society expects its companies, non-profit organizations, and governments to operate.
Why ESG matters in today’s business world
ESG is big business. The United Nations estimates that the annual global spending by governments and the private sector needed to deliver the world’s ESG-related goals is around $5 trillion a year, or more than 6% of world GDP.
ESG is also a consumer expectation. A study by the IBM Institute for Business Value (IBV) and the National Retail Federation found that purpose-driven consumers (those who choose products and brands based on their alignment to their values) represent the largest segment of consumers, at 44%.
And a Business of Sustainability study by PDI Technologies found that 78% of consumers want to buy from environmentally-friendly companies — but don’t know how to identify them.
ESG also impacts employee behavior. Research by IBM also found that 67% of survey respondents were more willing to apply for jobs with environmentally sustainable companies, and among those who had changed jobs in the past year, roughly one in three had accepted a lower salary to work for a socially responsible or sustainable organization.
ESG in the workplace: More than just compliance
At Great Place to Work®, the ethos of ESG transcends compliance; it’s embedded in the organizational fabric.
According to Tony Bond, chief diversity & innovation officer, “Our employees themselves, through employee resource groups (ERGs), are spontaneously responding to crises, like the Maui wildfires, without any directive from leadership. It’s a testament to the organic culture of community support and engagement with ESG values that exist within our workplace.”
This proactive engagement is a direct result of fostering a workplace where the mission and values are clear, and employees are deeply connected to them.
Building a sustainable workforce strategy
A sustainable workforce strategy must go beyond mere compliance and should involve all stakeholders, as Tony advises. This means the entire spectrum of individuals who impact and are impacted by the business — from employees at every level to customers, suppliers, and the broader community.
“Listen and be curious,” Tony suggests. “Understand potential risks through a systematic and continuous way of hearing from people, such as employee surveys.”
Setting a vision and gaining commitment from all levels are critical steps to moving beyond greenwashing.
Greenwashing is a bit like putting a fresh coat of green paint on something that’s not so environmentally friendly at its core. Imagine a company that’s more interested in looking eco-friendly than actually being eco-friendly. They might launch big advertising campaigns highlighting their small green initiatives, but behind the scenes, they’re not making significant changes to reduce their environmental impact.
Instead, there are ways to authentically implement workplace ESG, without greenwashing:
- Set a vision. Be clear on what you’re trying to achieve. Vague statements or targets will be called out. It won’t be possible to do everything, so focus on factors you can control.
- Get commitment. From all From the C-suite through to departments, ensure everyone knows what the mission is and how their role fits into it.
- Measure and report regularly. Assess where you’re starting and measure along the way. Set measurable, science-based targets so that you can draw a line between your efforts and results.
- Solicit feedback. Your employees will have opinions and ideas. As will the communities where you operate. Ensure your efforts are making a difference by checking in with those most impacted.
The role of ESG in employee experience and engagement
The correlation between ESG and employee experience is undeniable. “Employees engaged with ESG initiatives feel a sense of purpose that transcends their day-to-day tasks,” Tony observes.
This sense of purpose was clearly demonstrated when Great Place To Work’s ERGs mobilized support for the Maui fire crisis, leading to a significant contribution to the relief efforts without a formal prompt from the company’s leadership.
This organic response illustrates the intrinsic value of ESG in fostering a culture of proactive community support and underscores its importance in shaping a company’s long-term sustainability and reputation.
Giving employees a clear connection to something important — a purpose that is bigger than an individual role — is an important factor in an organization’s success. In fact, our research shows that when employees say their work has “special meaning,” rather than being “just a job,” they are 56% more likely to experience innovation opportunities.
Emerging trends: How ESG is shaping the future of work
ESG isn’t just about attracting sustainability-savvy consumers — it’s also about securing an employee base that is passionate about the work. ESG is a competitive advantage for both attracting and engaging employees.
The rising significance of social impact
ESG performance is a driver of employee satisfaction and an important piece of what makes a company a great place to work.
A Marsh McLennan study found that employers that have high employee satisfaction and are attractive employment destinations for university graduates tend to have lower carbon emissions, have more diversity, and make a greater effort to understand employee feelings.
Our own research has reported similar results. For example, we’ve found that people who feel their employers make a positive impact on the world are 11 times more likely to say they plan to stay with their organizations for the long haul and 14 times more likely to say they look forward to coming to work.
Assessing environmental, social, and governance (ESG) performance in the workplace
Measuring ESG performance within the workplace involves evaluating how a company manages and addresses various workplace-related factors. Here are key ways companies can measure ESG in the workplace:
Diversity and inclusion metrics:
- Demographic diversity: Track workforce composition, including gender, race, ethnicity, age, and other pertinent factors
- Pay equity: Examine gender and racial pay gaps to ensure equitable compensation
- Leadership diversity: Gauge the representation of diverse groups in leadership roles and on the board of directors
- Employee resource groups: Monitor the presence and engagement of employee resource groups supporting underrepresented employees
Employee engagement:
- Conduct periodic employee engagement surveys to measure job satisfaction, morale, and a sense of belonging
- Analyze turnover rates and reasons for departures to identify areas for improvement
Health and Well-being:
- Evaluate and track the 5 dimensions of employee well-being with data and benchmarks such as Great Place To Work Certification™
- Assess employee access to health and wellness programs, including mental health support
- Monitor absenteeism rates and employee health outcomes
Training and development:
- Track investments in employee training and development programs
- Measure the effectiveness of diversity and inclusion training and other educational initiatives
Workplace flexibility:
- Evaluate policies and practices concerning remote work, flexible hours, and work-life balance
- Solicit feedback from employees regarding the effectiveness of these policies
Workplace ethics and conduct:
- Monitor the volume and resolution of ethics-related complaints and concerns
- Assess the effectiveness of whistleblowing mechanisms and their usage
Supply chain labor practices:
- Evaluate labor conditions in the company’s supply chain, including suppliers and subcontractors
- Ensure that suppliers adhere to fair labor practices and ethical treatment of workers
Health and safety compliance:
- Ensure compliance with workplace safety regulations and standards
- Implement safety training and reporting systems to prevent accidents and incidents
Employee benefits and perks:
- Evaluate the comprehensiveness and equity of employee benefit packages, including healthcare, retirement plans, and other perks
Workplace sustainability:
- Measure and reduce the company’s environmental impact within the workplace, such as energy consumption, waste generation, and water use
- Promote sustainable commuting options and eco-friendly office practices
Community engagement:
- Track the company’s involvement in local communities and charitable initiatives
- Measure the positive social impact generated by workplace-related community programs
Employee rights and labor relations:
- Assess the strength of employee rights protections, union relations, and collective bargaining agreements where applicable
This comprehensive approach allows organizations to measure their ESG performance holistically within the workplace.
How are companies leading the way on ESG trends, what are some challenges and opportunities for ESG in the workplace. Look out for Part 2 of the ESG Report this Friday, 1 March.
