3 Ways ESG Reporting Deepens Employee Experiences

October 1, 2019

3 Ways ESG Reporting Deepens Employee Experiences

Eighty-six percent of the S&P 500 now publishes environmental, social, and governance (ESG) reports, a 68-percent increase from 2011. The trend will only increase. More than ever before, shareholders expect ESG reporting that is transparent, accessible, and forward-looking. CEOs now cite social impact as their top concern and management priority.

This means that conceiving and supporting the pillars of ESG strategy fall squarely within the purview of HR executives. 

Here are three specific ways that CHROs can leverage the ESG reporting process in support of another non-negotiable mandate: improving the employee experience.

1. Unleash Cross-Functional Collaboration
Too often, the value of ESG reporting is focused on the outcome: a corporate social responsibility (CSR) report, for example, that’s leveraged externally, to boost the valuation story for shareholders. Yet, the real value of ESG reporting is internal, through the development of the documents. Done right, the reports bring together cross-functional teams to facilitate the development and collection of key ESG data and impact. The result: more opportunities to discover and exploit inter-departmental synergies and relationships.

Consider, is your current ESG reporting structure delivering their reports to your employees? Or, like in many organizations, are your data gathering efforts siloed? Strictly speaking, it’s not necessary for your each of your internal ESG stakeholders to develop and assess their datum and findings collaboratively. Instead, you may be serving as the clearinghouse and collator. 

What additional energy and momentum could be injected into each of your ESG work streams if the major players were supported to provide feedback to and improve upon one another’s efforts? A richly collaborative culture elevates employees’ experiences within your culture—and elevates opinions of your culture.

2. Anchor ESG Initiatives to Organizational Values
ESG initiatives are more than a veneer of good works. They’re tied to the servant purpose, values, and daily operations of your organization. Through developing ESG reporting, key internal stakeholders are provided a platform to articulate these linkages in a way that is relatable, believable, and meaningful to all employees, from the front line to the CEO. 

Are your ESG initiatives clearly and consistently tied to your organizational values in a way that is highly visible to each and every employee in your company? Taking a step back, ask yourself, do employees have a solid understanding of your values, and the key behaviors they must practice to bring those values to life? If not, you’ll benefit from developing an organizational constitution—an inclusive, “we the people” approach to developing a “more perfect,” more purposeful, positive, productive culture. 

Armed with such a tool, you’ll be able to anchor each of your ESG programs—incentive plans, for instance—to your organization’s values and valued behaviors, forging seamless alignment between your company’s service mindset, good citizenship, and the ways that each employee is expected to show up and engage with one another everyday. Values-based cultures in which the values are brought to life across every component of the company forge employee experiences that are truly exceptional.

3. Daylight and Redirect Values-Misaligned Processes and Behaviors
Time and time again, CEOs tell me that they don’t get enough credit for all the good they do. Typically, this is because they’re doing one of two things: (1) not telling their good works story well enough to the right people; or (2) they’re allowing a few values-misaligned employees to wreck havoc with their best intentions for building a sustainable, socially-conscious company.

When processes and projects are studied for their ESG reporting value (and, conversely, potential shareholder activism fodder), the inevitable happens. You discover behaviors and decisions that are not aligned with the company’s core values. This is a profound opportunity. 

Backed by the demand for transparency inspired by your ESG reporting initiative, misaligned behaviors and decisions can be surfaced and redirected. Your values-based culture can be strengthened, creating a more positive experience for everyone. As you know, correcting poor behavior and elevating decision-making processes isn’t an easy or quick endeavor. Yet, what’s at risk if you let actions slide that are disrespectful, not just disrespectful to other employees, but also to your community and environment? 

Today, ESG reporting is no longer a nice thing to do; it’s a given, just like the directive to improve your employee experience. Fortunately, you can leverage the former to tackle the latter.

The Authors: 

S. Chris Edmonds is Founder and CEO of the Purposeful Culture Group.