HR, board the sustainability bus before it’s too late!

HR may be missing the bus

By Rue Stanley, Ecobusiness Exchange

Human Resources (HR) leaders have a strong role to play in ensuring that sustainability becomes part of business as usual. The HR department has value to add, and yet seems reluctant to get involved. For many years HR professionals have been fighting to achieve more recognition in corporations. It’s a battle that is being slowly won by HR business partners and inspirational leaders.

In the past, CSR has had a bad press; being viewed by some as aesthetic and unnecessary. Perhaps, HR professionals are reluctant to risk the hard won progress they have made. However, times are changing: CSR is not just warm and fluffy it has now morphed into sustainability. If HR doesn’t act, it will risk being viewed as being out of step with the business once again.

Business leaders and business thought leading publications are recognizing that sustainability is important:

  • Paul Polman CEO Unilever, 2011 “We are putting ‘sustainable living’ at the heart of everything we do. We have found that once you start looking at product development, sourcing and manufacturing through a sustainability lens, it opens up great opportunities for innovation and cost reduction.”
  • Schumpeter Economist May 19th 2012 “CSR is evolving. Gone are the days when it was mainly about managing corporate reputations “greenwashing”, to its critics.

It is now more about business fundamentals, such as how products are designed and supply chains are managed. The loudest CSR buzzword these days is “sustainability”. The proportion of managers who say they think sustainability is a key to competitive success has risen from 55% in 20101 to 67% last year according to an annual survey of 4000 managers in 113 countries by the MIT Sloan Management Review and the Boston Consulting Group. Companies have been busy creating “Chief Sustainability Officers” founding “Sustainability” units and employing “sustainability consultancies”

With CSR losing its soft and fluffy image and morphing into “sustainability” which in these hard times is recognized as a way of increasing an organizations reputation, reducing costs, attracting and motivating staff as well as being linked to business ethics. I ask HR professionals to take another look, get involved you have a lot of value and knowledge to bring to sustainability/CSR.

HR people have a unique position in large organizations: they get to work across all departments, get a truly holistic picture of the business and the opportunity to understand the challenges. A criticism often leveled at HR is that success is hard to quantify. It’s challenging to measure success in sustainability, but not impossible. According in a KPMG survey in 2011, 65% of large enterprises have been carrying out CSR reporting because they believe this will enhance the value and reputation of their organization. Reputation and value are metrics that can be measured. Listed companies that perform highly are selected and featured on indices such as the Dow Jones Sustainability Index. Over a 1000 investors are members of the United Nations Principles for Responsible Investment and are obliged to request information related to environment social and governance from their invested companies.

HR can help with some of the major challenges that face organizations wishing to develop their sustainability programs. Employee motivation and engagement are essential to successful sustainability programs. The benefits are commercial as well as cultural. Using sustainability as a way of engaging employees with the organization can reinforce company values. Community volunteering can develop skills and help with team building as well as enhancing the reputation and feel good factor in a company.

Compliance and business ethics are areas that can be supported if not driven by HR departments. Equality, diversity, human rights and cultural cohesion are all areas that HR professionals can be comfortable with and make up a significant part of the discourse of corporate social responsibility.

Data collection has been recognized as the most difficult part of sustainability reporting and HR systems such as core HR, recruitment and learning & development systems can provide information to support reporting frameworks such as the United Nations Global Reporting Initiative (GRI). The GRI has over 6000 large enterprises reporting their progress against a number of key performance indicators (KPI’s) supporting the Ten Principles covering: human rights, labour, environment and anti-corruption.  Organisations demonstrate their progress by reporting against key performance indicators such as the ones listed below:

  • LA2 Total number of new employee hires and employee turnover by age group, gender and region
  • LA15 return to work  and retention rates after parental leave by gender
  • LA10 Average hours of training per year per employee by gender and by employee category
  • LA13 composition of governance bodies and breakdown of employees per employee category according to gender, age, minority group and other indicators of diversity.
  • LA8 Education, training, counseling, prevention and risk control programs in place to assist workforce members , their families or community members regarding serious diseases
  • SO3 percentage of employees trained in organizations anti-corruption policies and procedures

To be successful sustainability needs to be a consideration across every department and business ethics, equality and diversity, cultural cohesion, recruitment, human rights and learning and development have a natural place in business as usual for the HR department.

Leading businesses are aware of sustainability as an opportunity and a way of differentiating their companies. Investors are also concerned about business environmental, social and governance. This is the right time for HR professionals to expand into an area that they have a right to feel comfortable with and demonstrate their expertise and leadership.