Is Your ESG Program Reflective of Your Company’s Values?

Feb 16, 2022, 07:30am EST

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Is Your ESG Program Reflective Of Your Company's Values?

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Sandra Mahadwar Forbes Councils Member Forbes Human Resources Council COUNCIL POST I Membership (Fee-Based) Leadership

ChiefInclusion & Diversity Officer and Senior Vice President of Talent Management at KLA.

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The Great Resignation continues to dominate conversations about the workforce, which at a high point last year saw 4.5 million people leaving their jobs in the month of November 2021 alone. Subsequently, companies across industries are facing a heightened battle to retain and attract the talent so important to the success and sustainability of their business.

Though HR and leadership teams have responded with many changes in an attempt to turn the situation around - from lucrative salaries to flexible work-from-home schedules to amping up communication around diversity and inclusion (D&I) - merely "checking the boxes" of employee benefits, workplace culture and even corporate social responsibility (CSR) opportunities often isn't enough. For a company to have a successful and empowered workforce, its employees must buy into, believe and engage with the foundational values of the company, which requires their employer to give them the opportunity to do so.

Studies show environmental, social and governance (ESG) performance attracts prospective employees and improves existing employee satisfaction, affirming the notion that fulfilled employees work harder, stay longer and seek to produce better results for the organization. Adding to this is the fact that new college graduates - known to place greater importance on environmental and social concerns - only continue to grow as a large percentage of the total global workforce. Going forward, ESG will be a program employees want to proudly engage with. It can no longer be an afterthought, but rather an initiative that is embedded in the values and guiding principles of every brand.

Designing An Effective ESG Program

An effective ESG program is rooted in driving impact and doing the right thing. Thus, employers need to both reevaluate existing initiatives and ensure new offerings are reflective of corporate values. Taking a page out of Nordstrom's playbook, a value-first approach can also be part of the hiring and training process. The strategy may revolve around fostering inclusive and diverse work environments; protecting the health, safety and well-being of employees; reducing the organization's environmental footprint or all of the above.

• Inclusion And Diversity: One initiative that has become widely adopted is employee resource groups (ERGs), which create a space for all voices to advance related company efforts. ERGs demonstrate an employer's commitment to advancing social equity in action, as these programs provide a tangible feedback loop between employee and employer on important social issues and give employees the opportunity to help their company achieve D&I goals. ERGs also provide a platform for employees to come together to achieve common diversity interests and help empower a more inclusive and equitable workplace. All signs point to ERGs becoming a mainstay in corporate America, with companies like Whirlpool and Salesforce demonstrating the value these groups have played in important issues like the pandemic and racial-justice movement.

• Benefits And Wellness: These offerings should evolve as the needs of employees change and in a timely manner. Findings from a new report from Great Place to Work show that a staggering 4.8 million cases of parental burnout in 2021 could have been prevented. For large corporations or those operating in high-growth industries, parental benefits- such as reimbursement for child caregivers or paid time off to assist children with remote learning- should be commonplace at this stage of the remote or hybrid work approach.

• Talent Development: Programs such as enterprise leadership training enable mentorship and coaching at all levels and ensure those from underrepresented groups have the opportunity to develop skills needed to advance into leadership positions. Employees' best work, however, goes beyond merely strengthening their skills. An intentionally holistic approach to talent development that covers all dimensions of an employee's life- from coaching and career courses to family care and bonding leave- helps them bring their "whole self' to work and enjoy a

rewarding career. If the success of Patagonia is any indication, this approach proves to serve companies and employees well by keeping turnover rates consistently low, year over year.

• Community Impact: Another important part of ESG is an awareness of and dedication to the impact a company has on the environment and community, be that in reference to people or the planet. For employees to drive impact in their communities, such as volunteering or raising funds against food insecurity, employers can create a thriving employee giving culture by providing tools and support that enable them to lead, participate in and contribute to projects that maximize the impact of their engagement. Home Depot's associate volunteer force, Team Depot, is a great example of this concept in action.

Measuring And Sustaining Success It's imperative that companies hold themselves accountable with ESG programs. They should be designed with measurable goals and leadership should proactively offer regular progress updates to employees and other stakeholders to see commitment in action.

Consider releasing an annual impact report to demonstrate these results, share progress and outline how the company's goals are maturing. It may also be of value to engage with customers, partners and industry peers for inspiration, to enact joint programs or merely to trade best practices and key learnings.

Benefits Today And Tomorrow Reducing attrition, attracting new hires and cultivating a fulfilling workplace top the immediate benefits of aligning ESG to a company's values. However, there are long-term advantages too. ESG is about doing the right thing while empowering and investing in today and tomorrow's leaders. Companies should equip their employees with the skills, confidence and support they need to succeed and grow.

If your organization is anything like mine, ESG stewardship is an integral part of the corporate mission and an important element of the corporate citizenship journey. Workers are looking for companies they can believe in, and ESG is one of the most impactful ways to meet this desire.

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Sandra Mahadwar

Chief Inclus ion & Divers ity Officer and Senior Vice President of Talent Management at KLA. Read Sandra Mahadwar's full executive P-rofile here.

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