Driving employee engagement through environmental sustainability
With today’s socially and environmentally aware workforce, and as Generation Y & Z begin to dominate the labour market, companies must work harder than ever to ensure that their CSR programmes support and drive employee and stakeholder engagement, as well as competitive advantage. CSR, and specifically a company’s sustainability profile, is an increasingly important catalyst for employee recruitment and retention, giving HR Directors a strong foot forward in their quest for talent.
From CSR to ESG
CSR is a vital tool in the armoury of many businesses and increasingly underpins the culture and values of the company and therefore, in some shape or form, forms an important part of most HR executives’ remit. The definition and role of CSR has matured fundamentally. Gone are the days where CSR was restricted to individual social and philanthropic activities that relied on delivering support to local communities or considered a ‘nice to have’. Today CSR frequently encompasses a far broader range of sustainable business practices, including environmental management or ensuring an ethical supply chain that can satiate the evolving needs and demands of stakeholders. The drivers for this broader approach go beyond doing good. They may include risk management considerations such as concern about future energy costs and security, the ethical sourcing of raw materials, or increasing shareholder and regulatory pressure to show sustainable governance.
Put simply, CSR is evolving into Environmental, Social and Governance (ESG) and has become about future proofing business by future proofing communities and the planet.
Satiating the demands of Gen Y and Z
The modern workforce is more socially and environmentally aware than ever before. Pay has long been superseded as a driver of employee engagement and instead consumers have developed a resilient social conscience that acts as a major driver when choosing an employer. As Generation Y and Generation Z move into the job market, set to make up 50% of the workforce by 2020, HR teams arguably face an uphill battle to attract the best talent and achieve brand loyalty. According to the Cone Millenial Cause report, 80% of 13-25 year olds want to work for a company that cares about its societal impact and would refuse to work for an organisation that did not consider it. One US study published in the Journal of Organizational Behavior (2012) has also gone so far as to suggest a positive correlation between a company’s green credentials and staff productivity. Those firms with eco-friendly initiatives were found to have more productive employees than firms without environmental standards in place, with workers citing training, interpersonal communication and a positive social identity as some of the key criteria for employee engagement.
These signals suggest that expectations of CSR continue to increase. Yet increased access to CSR information means that current and future employees ask more demanding questions around the effectiveness of programmes too, and complicating matters further is the reality that whilst millenials are more conscious of societal and CSR issues, they are also more blinkered to the efforts companies are making. The 2012 Sustainability Leadership Report analysed 100 leading companies and found that, although more CSR actions were underway, the perception of CSR activities among recent graduates and investors had dropped.
Building brand loyalty is becoming ever more difficult, and companies need to work harder than ever at CSR to make an impact with stakeholders.
It’s one issue attracting, another retaining
Reputation is a key consideration for businesses who want to stand out in a crowded market place and promote brand loyalty. And with the changing attitudes of employees towards the responsibilities of business, companies must adapt to match this if they are to attract the best candidates – and importantly, retain them. Only through aligning with the rapidly evolving demands of today’s employees and taking action to proactively demonstrate their social and environmental credentials, will businesses future-proof their brand and remain well placed to appeal to the new generation of people coming into business.
The addition of environmental leadership, management and sustainability to the traditional philanthropic activities of CSR delivers vital business value and can be a powerful statement of intent that enhances reputation and improves stakeholder engagement. Importantly, it can also save money by attracting and retaining employees in a unified working environment. Creating a workplace with loyal, long-term employees also fosters further loyalty in newer recruits and encourages retention.
Your competitors are doing it already
Carbon management is one pillar of a CSR programme that can demonstrate action and leadership and many companies are already well on the way to having a strong position on their impact. 96% of FSTE 100 companies and 69% of the FTSE 350 reported their carbon emissions to the Carbon Disclosure Project (CDP) in 2012. Regulatory drivers for organisations to take carbon reporting seriously are increasing, and in turn, this will begin to ripple downwards as consumers become more highly attuned to the environmental profile of their current and potential future employers.
Retailer M&S was one of the first companies to quantify the benefits of its CSR programme through its innovative Plan A which saved the company £185m over five years. Programmes such as these are led from the boardroom and if leveraged correctly can unify functions in the C-Suite from the CFO to the CMO and CIO, and in turn serve to make HR a strategic driver within the business.
If you talk the talk, you need to walk the walk
Having pledged to an environmental position you must commit to a comprehensive carbon plan and reinforce energy saving methods within the business: a company’s reputation can be easily harmed by apathy. Promote your actions among your staff and to the rest of the corporate world, positioning the brand as a benchmark for stellar CSR activity. Sustainability is a differentiator in a competitive job market, able to attract and retain talent – HR managers must promote this activity to optimise the potential benefits.
Communicate your success to reap the benefits
Today’s holistic CSR programmes are concerned with more than philanthropic activities and offer true business advantages. Businesses now, more than ever, must align themselves with the increasing carbon and social consciences of the generation Y&Z workforce to preserve their brand’s reputation and assume a competitive position in the quest for talent. HR Directors can reap significant reward through championing their brands’ CSR investment among existing and prospective employees. Through effective communication of any schemes and landmarks in a company’s CSR programme, HR can attract and retain brand ambassadors, improve brand loyalty both externally and internally whilst safeguarding the future of the business.