Sustainability is back on the business agenda. Bond Dickinson’s “Beyond Responsibility” report brings together the views and experiences of more than 60 leading professionals to assess how the growing emphasis on sustainable business practice presents opportunities and challenges for them. The report also contains some key messages for HR directors.
Sustainability plays out in different areas for different organisations. For some, the focus may be on corporate governance, for others resource security in the supply chain, or ensuring a resilient, skilled and motivated workforce in the face of changing social norms. All of these endeavours have a significant impact on the HR function. From providing ad hoc advice on the implications of working with particular business partners, through formalised programmes to support new and innovative recruitment programmes to board reporting responsibilities, the HR function has a key role in supporting the sustainable business agenda.
Translating the strategy
The importance of sustainability in corporate culture is often little understood, whether because the corporate policy itself is unclear or because the workforce has not been properly engaged. Some employees will mutter that sustainability is a luxury rather than a business necessity; our report demonstrates that the opposite is true. In the words of one of the lead participants in our study, Robert Ivens, Head of Legal at retail business Marks and Spencer: “I am of the absolute conviction that sustainability is inextricably linked to business performance”.
How HR directors help the business translate the sustainability agenda into improved business performance
What is very clear is that to engage the workforce, sustainability must be linked to positive and tangible aims. Too often sustainability is linked to worthy but intangible values. If employees assume that sustainability is linked to carbon “trade-offs” and climate change targets that appear far removed from individual actions, they will not engage.
HR directors can – and should – lead the engagement process, setting out a positive vision for what sustainability means for their business and all those who work within it. Instead of framing the debate by reference solely to slowing the change in weather systems, the discussion should be focussed on actions that impact positively on child-labour, food production, flood resistance and maternal health. Instead of referencing only global issues, there should be focus on sustainability that affects local people and communities.
Our report exposed a recognition of the need to create and protect “moral capital” within organisations, as increasingly well-informed stakeholders expect businesses to do not only what is “legal” but what is “right”. “We are now dealing with morals and not the law and I think that it is going to become our stock in trade” (general counsel from retail sector). The HR function has a clear role to play in promoting a culture that supports and promotes “doing the right thing”. If that can be instilled into every team, at every level, there will be positive outcomes to the business in terms of performance, engagement and pride at being associated with a business that is “doing the right thing”.
Internally, sustainability also presents an opportunity for strengthening corporate resilience. In light of changing social norms, values and demographics, HR policies, employment contracts and incentive schemes can be effective tools to influence the right behaviours, attract talent and retain skills.
Often, sustainability can be approached first and foremost as an organisational risk factor. This begins with the analysis of the risks, whether legal or financial, of adopting new business practices. There are, however, risks in failing to adopt sustainable business practices, which include risks to brand and reputation. There are risks, too, in failing to articulate the sustainable aims the business is seeking to meet appropriately.
“People want to make promises; they want the community to embrace the projects so they will tell [others] how wonderful the project is going to be. You need to be a bit careful there because if it doesn’t turn out to be that wonderful, exactly in the way you said, what level of commitment did you make in terms of PR, reputation or even legally?” (Senior legal counsel, renewable energy sector.) It is incumbent upon HR directors, who are responsible for employee performance and engagement, to ensure that the key messages around sustainability are delivered in a way that manages the risks of failing to deliver exactly what was envisioned at the outset. The journey towards achieving sustainable business practices is not straightforward and risk management should be carefully considered in terms of both setting the destination and communicating with staff and stakeholders.
Leading the field
“Leaders need to be able to negotiate their way around multiple perspectives” (general counsel, real estate sector) - HR directors do this on a daily basis. A number of HR directors are playing active leadership roles in the sustainability agenda, helping their organisations and stakeholders to engage with it in a way that makes business sense and which is accessible to the workforce. In so doing, they are truly leading the field.