HR steps up: Driving sustainable change in corporate culture

Amidst rising ESG expectations, HR leaders are propelling corporate transformation towards sustainability to shape a green future for their firm.
By: | February 22, 2024

The winds of change are sweeping through the corporate landscape, and HR stands at the forefront. As Environmental, Social, and Governance (ESG) expectations surge, HR leaders are transforming from mere personnel managers into powerful changemakers, driving organisations towards a more sustainable future.

Gone are the days when sustainability was relegated to a niche concern. Today, organisations face rising pressure from stakeholders – investors, employees, and consumers alike – to demonstrate their commitment to environmental responsibility, social justice, and ethical governance. And at the heart of this transformation lies HR, uniquely positioned to embed ESG principles into the very fabric of an organisation.

“Organisations are increasingly held accountable not only for their financial performance but also for their impact on society and the environment. This shift places HR leaders in a pivotal position to drive meaningful change within their organisation,” Joanne Flinn, Chair of the ESG Institute, told HRM Asia. From attracting talent passionate about sustainability to fostering a culture of purpose and action, HR’s role in shaping a sustainable future cannot be overstated.

The journey begins at the recruitment stage. Flinn suggested prioritising candidates who align with the organisation’s ESG values and equipping them with relevant training from day one sets the tone for a sustainability-driven culture. “As ESG skills are short in supply, incorporating ESG-focused training in your onboarding process is a double win to instil these values from day one and demonstrate tangible action,” she explained.

“Uplift sustainability-based knowledge and action through ESG trainings and workshops convert the often big picture of people, planet and profit into practical actions that generate value.”– Joanne Flinn, Chair of the ESG Institute

She encouraged HR leaders to align performance metrics with ESG goals to incentivise sustainable practices and behaviours among employees. She elaborated, “Uplifting sustainability-based knowledge and action through ESG trainings and workshops convert the often-big picture of people, planet and profit into practical actions that generate value. This can include doing things that innovate towards reducing the organisation’s carbon footprint, improving employee wellbeing, and enhancing community engagement.”

The cornerstones of sustainable success

To inspire practical application, Flinn, who was also the Instructor for the ESG Masterclass titled Sustainability in Action for CHROs, held last year in collaboration with HRM Asia and the ESG Institute, suggested leading by example through tangible initiatives. These can include establishing networks of ESG champions to spearhead internal efforts or implementing green office policies like reducing waste and encouraging sustainable commuting.

But Flinn’s vision extends beyond internal boundaries. Instead, she encourages organisations to “go beyond” by facilitating employee participation in community and environmental projects. This fosters a sense of purpose and strengthens the organisation’s social impact, aligning with its ESG objectives.

Additionally, regularly communicating ESG progress and achievements builds accountability and fosters pride within the organisation, she added. Employees then become invested in the organisation’s sustainability and better understand how their individual actions contribute to a larger purpose.

An attendee of the ESG Masterclass was Elena Chipalova, Regional HR Director of Carrier, who emphasised the urgent need for building skills in ESG within the HR community. She highlighted the demand for leaders in Asia who are not content with stability but are instead driven to pursue green opportunities and can effectively lead teams in this direction. She also referenced LinkedIn data from August 2023, which indicated significant growth in ESG-linked professionals but an even higher demand for these skills.

She said, “The topic of ESG for HR is no longer a nice to have conversation. It is an important reality. To attract and retain talent, the shift in thinking is moving from ‘We are the best employer in the world’ to ‘We are the best employer for the world’.”

Chipalova detailed ongoing discussions within her HR team on accelerating the organisation’s transformation journey from compliance to commitment, integrating ESG accountabilities at all levels. She shared Carrier’s simple yet impactful goal of ensuring every employee turns off the lights upon leaving a room, emphasising the role of HR in setting individual goals, incorporating ESG commitments into job descriptions, and facilitating educational events to drive this cultural shift.

Leading the charge

Looking into 2024, Flinn anticipates HR departments playing a pivotal role in shaping organisational strategy and outlined three key pillars. First is strategic workforce planning, which involves aligning talent acquisition, development, and retention strategies with the organisation’s long-term goals and business strategy.

Flinn highlighted the challenge posed by the shortage of sustainability-based skills and suggested a strategic approach to building these skills internally rather than solely relying on external hires. “This will be important for forecasting skills and roles that will be needed in the future but also ensuring that the organisation’s workforce is diverse, inclusive, and equipped to tackle ESG challenges,” she added.

READ MORE: The role HR can play to enable ESG outcomes

Next is cultural transformation. Flinn advocates for driving a shift in organisational culture to prioritise sustainability and social responsibility alongside profitability. This entails making balanced decision-making a core part of the organisation’s identity and operations. And lastly is ESG leadership development, where Flinn emphasised the necessity of preparing current and future leaders to understand, integrate, and act upon ESG principles in their decision-making processes.

Flinn concluded, “The ESG Institute is preparing HR professionals for this critical leadership role by offering specialised training and development programmes focused on ESG competencies, leadership in sustainability, and strategic HR practices aligned with ESG principles. By equipping HR leaders with the knowledge, tools, and frameworks to integrate ESG into their strategic planning, the Institute is enabling HR to not only have a seat at the strategy table but to lead the conversation on sustainability, social responsibility, and business profitability.”