Unravelling ESG: HRD Roundtable

Unravelling ESG

Hosted by Chris Rowlands & Adam Oliver
Speakers: David Blackburn, Kirsty Green-Mann, John Stewart.

Network HR recently hosted their latest HRD roundtable, bringing together HR leaders from across industry to tackle the often-complex subject of ESG. This interactive session aimed to unravel the differing interpretations of, and strategic commitments to, ESG across a wide variety of organisations and sectors.

We were thrilled to be joined by Kirsty Green-Mann, Head of Corporate Responsibility at law firm Burges Salmon, David Blackburn who is currently Chief People Officer at the Financial Services Compensation Scheme, and John Stewart who is Director of HR at energy giant SSE plc. Kirsty, David and John helped frame each of our discussion points, and began by sharing their own personal experiences of implementing, shaping, assessing and evaluating ESG frameworks. This prompted a broader discussion on how overlapping inter-company accountabilities are best managed, and how identifying and involving the right stakeholders is critical to continuous improvement and ongoing engagement.

Kirsty opened the roundtable by discussing how ESG has evolved over her 20-year career, noting the often confusing phraseology and buzzwords regularly attached to this area of work, including social responsibility, sustainability, CSR, corporate ethics, corporate responsibility and corporate accountability (to name but a few!).

With the increased focus from investors on Environmental, Social and Governance concerns it makes absolute sense that many companies in the Financial Services sector have been seeking ways to demonstrate their advocacy and commitment, eager to position their brands as ‘responsible businesses’.

One of Kirsty’s key recommendations for businesses starting their ESG journey was to conduct a materiality assessment to understand which issues are fundamental to both your business and stakeholders, and if your strategy will align with your clients.

David shared that he recently chaired an advisory group within the Financial Services Skills Commission, noting that many businesses currently struggling with the complexities of ESG are often also lacking the leadership skill-set required, and the deep knowledge, both of over-arching strategy and of individual ESG sub-categories, to effect meaningful change within their organisation.

This is a reflection of the poll we ran in the session, with 76% of our attendees stating they do not have an individual wholly dedicated to ESG within their company.

The question then arose – “well where does ESG sit?”.

It is often attributed to HR due to their central, influential role and their “people-focused” skill set. Whilst many of our attendees agreed that ESG should, at its core, sit within the people leadership team, it’s imperative to invest in a specialist to lead this journey, as well as a number of fundamental subject matter experts (be they internal or external).

The overall consensus was that HR may be the “home” for ESG, but this is a shared responsibility across any business, and to really succeed this needs to be a central focus, championed by leaders and stakeholders to meaningfully engage.

The danger of drifting toward reactionary campaigns, tokenistic crusades or tick-box exercises is very real, and the cynicism around ESG and corporate responsibility is often palpable; the phrase “greenwashing” appears regularly in response to company environmental statements as an example.

The depth and breadth of legislation across the ESG space can sometimes feel overwhelming, however a broad, authentic strategy – closely linked to your business purpose and corporate goals – can provided an opportunity to differentiate your business both to employees and investors. Where there is internal resistance to change (inevitably, some noted) being able to clearly articulate and showcase the evidence of benefits such as enhanced talent attraction and retention, brand reputation, return on investment, risk mitigation, enhanced productivity and enhanced client confidence were all deemed key.

Kirsty shared the journey of Burges Salmon, citing the decision many years ago to articulate their vision of becoming a ‘responsible business’ as key to their current ESG strategy. Equally important was to place great emphasis on engaging key internal stakeholders, inclusive of subject matter experts, making clear the importance of their individual role in framing their wider ESG strategy and in deciding who should be accountable – both publicly and internally – for each element. In addition, they conducted a benchmarking exercise to understand what resonates most with their clients. Finally, in order to create a single framework that underpins their efforts, they looked to the UN Sustainability Development Goals, alongside their wider business objectives, to manage both risk and opportunity in this space.

Burges Salmon’s report can be found here.

John Stewart then showcased the work that SSE have done over the past 6 years of their ESG journey, evidencing a very impressive timeline of achievements. What hit home to the roundtable attendees was the very detailed outcomes in each individual area of ESG, articulated through clear ROI monitoring and highly visible public reporting. This spanned Employee Training, Social Mobility and Apprenticeship Programmes, Carbon Usage and Renewable Energy commitments, alongside a raft of industry and cross-industry pledges that included Fair Tax, Living Wage, Gender Equality Indices and the FTSE4Good programme. SSE has continuously strengthened it’s strategy and expertise, most notably with the appointment of a dedicated experts and a Chief Sustainability Officer to drive its ESG strategy.

Two key takeaways from John presentation were the importance of gaining continuous feedback – from staff, investors and industry peers, and to be open, honest and transparent when publishing ESG-based reports. Whilst helping to articulate your journey, this latter point also goes a long way in quashing any suggestion of corporate ‘virtue signalling’.

More information on SSE’s efforts in the ESG space can be found here.

Lastly, prompted by John’s presentation, the group turned to measuring the success of ESG strategies and associated frameworks. It became clear, as with most corporate paradigm shifts (rightly or wrongly), client demand is a key factor driving change. Articulating and evidencing your organisation’s work in a way that satisfies an often broad and varied client base, with not always complimentary expectations, provides a challenge, as is the ability to collect the right data in a sea of endless data points. When this includes supply chain disclosure, as it often does in the world of ESG, this challenge can sometimes feel like an impossible task. There is external help available, however.

Frameworks mentioned by our attendees that have aided compliance, alignment and/or internal engagement on an ESG journey included;

-BITC's Responsible Business Tracker
-SASB
-UN Sustainable Development Goals
-ShareAction's Workforce Disclosure Initiative 
-The FTSE4Good Index Series
-Investors In People
-The LACA Employer & Employee Guide

Our roundtable session provided further evidence of the complexities of ESG, with seemingly endless sub-categories demanding individual focus and competing daily with a wide variety of stakeholder expectations and operational pressures. However the key message remains: whilst investment in ESG is crucial, this must be reflective of - and aligned with - your business goals. The ‘social’ element of ESG was regularly highlighted as the key to success, and this is where HR teams should thrive. Without addressing the people element of any strategy it’s objectives are rarely met, and the same can certainly be said of environmental or governance commitments. Board advocacy and open, honest communication – be that through informal or formal channels – also makes the journey significantly more achievable, and dare we say enjoyable!

Thank you to our speakers and attendees who all contributed to an excellent session.

To keep updated with our upcoming events, please contact Lauren Howard – Head of Networks and Communication at the Executive Network Group.