When we consider sustainability within HR, our minds often gravitate towards non-financial perks like training, growth opportunities, flexible working hours, gender equality and safety. However, there’s a crucial link between sustainability and remuneration that organisations should recognise—especially as it gains prominence.
What is CSRD and how will it impact your business?
The introduction of the Corporate Sustainability Reporting Directive (CSRD) aligns with the European Sustainability Reporting Standards (ESRS). Soon, organisations won’t be able to ignore the significance of a robust, integrated ESG (Environmental, Social, and Governance) policy. Starting in 2025, Europe mandates that listed companies and financial institutions with over 500 employees provide detailed sustainability performance reports. These reports must address risks, opportunities related to social and environmental issues, and the impact of their activities on people and the environment. Consequently, organisations will need to extend their sustainability policies to encompass compensation and benefits—a move that reinforces the importance of ESG policies. Topics such as pay equality, employee vitality, ESG incentives, and financial arrangements in case of illness or retirement, are only a few examples of how sustainability and reward management can be linked to each other.
How to get your employees on board in ESG?
A recent article published by #ZigZagHR zoomed in on studies by Vlerick Business School and the Institute for Corporate Lawyers. These studies reveal that sustainability profoundly affects long-term employee satisfaction, touching an emotional dimension. Very specifically, they have seen that there is a significant relationship between employees’ satisfaction with their employer’s attention to sustainability and their intention to continue working at the company. To foster a more sustainable organisation, subtle behaviour changes and a sustainable mindset are essential. One effective approach is “nudging,” where employees are gently encouraged to adjust their daily routines. An organisation can, for example, offer flexible working hours, allowing employees to use public transportation or avoid peak traffic times. Another example would be for an organisation to provide facilities such as bike racks, showers, and changing rooms to support employees who bike or walk to work.
Must haves in your ESG policy
Within an organisation’s sustainability policy, stakeholder alignment is critical. Organisations must consider their impact on the environment and vice versa. Additionally, they should critically assess other stakeholders, including suppliers. This analysis informs long-term goals and short-term action points, culminating in a “materiality assessment.” Transparent communication and stakeholder involvement are key components of this process.
Lastly, management’s role modelling and tone of voice play a pivotal role. While it may seem challenging initially, prioritising high ESG scores ultimately benefits an organisation’s long-term financial returns.
Interested to find out more about the topic? Read the article published by #ZigZagHR
Sources
https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en
https://www.linkedin.com/posts/zigzaghr_verlonen-met-impact-een-verhaal-van-ratio-activity-7206187036142092288-HGiJ?utm_source=share&utm_medium=member_desktop