ESG: DOING RIGHT BY PEOPLE AND OUR PLANET

Now more than ever, why we work is intricately linked to our local, national, and global communities. This link has brought about a reckoning of responsibility, with a long-overdue lens focused on organizational accountability to create spaces that support employees and their work. Although nuanced, achieving this accountability begins by tying organizations’ greatest environmental and social impacts to their values and belief systems.

As I contemplate the future of work, I am deeply driven by the pressing need to promote social equity and reduce environmental impact. I regularly engage in conversations with the next generation, including my own young adult children, about why concepts like equality, transparency and accountability, which seem inherently simple, can be so challenging to implement. Humans should all be afforded fair and just treatment in the world. If that complex but straightforward problem was solved, the workplace would fall in line.

In today’s world, social inequity and climate change are at a critical crossroads. Global events and actions have had a domino effect on our communities. We saw a prime example in June 2023 as the devastating wildfires in Canada resulted in reduced air quality throughout the US East Coast. We cannot afford to ignore or be paralyzed by the expansiveness of the global issues in front of us. A global pandemic clarified how connected we are and how our choices at micro and macro levels impact both humanity and the communities where we live and work.

We find ourselves at a crossroad between the “volunteerism phase” and the “evaluation & adoption phase.” No longer can we afford a selective approach. We must understand where we are and how we can set goals to measurably improve, as inaction has dire consequences. Even at the individual level, action brings about momentum and

ESG IN THE WORKPLACE TODAY & BEYOND

ESG (Environmental, Social, and Governance) has become a commplace acronym in the world of business, strategy, and planning. ESG in its simplest form is first, “doing the right thing by people and our planet,” then being able to document and prove that value. The "governance" component of ESG brings both opportunity and challenge. Trust, competence, accuracy, and accountability play a key role in ensuring that business strategies support the environment and its inhabitants.

As the prominence of social consciousness continues to rise, the influence of both public and privately owned business regulatory reporting requires a harder look at the organizational role of supporting their people and keeping the planet habitable for future generations. While publicly held companies have launched more formalized ESG initiatives and reporting, some privately held companies are still grappling with how to effectively define and prioritize environmental and socially conscious reporting.

Whether public or private, these critical and timesensitive considerations have moved up the business agenda. We are seeing a major transition from financially motivated ESG initiatives to avoid risk to ESG initiatives that align with customer expectations and employee demands for purposeful work. These initiatives influence organizations' business drivers, work processes, and engagement with their stakeholders, customers, and employees.

WHY ESG MATTERS?

Stakeholder Expectations are demanding transparency, accountability, and responsible practices from organizations

Strategic Decision Making proactively manages risks, enhances resilience and drives innovation, and competitiveness

Employee Expectations are high, and employees are more likely to be engaged and committed when they feel their organization is socially and environmentally responsible Sustainable Growth Strategies and ESG align, providing better positioning to capitalize on emerging market shifts while differentiating from competitors

75%

OF U.S. EXECUTIVES SAY ESGS HAVE POSITIVE IMPACT ON EMPLOYEE ENGAGEMENT

86%

“Not only does our team consider how building design, construction, and operations can impact residents and tenants, we also walk the talk when it comes to designing our own offices. The enterprise headquarters of Crescent Communities, located in Ally Charlotte Center, was completed in 2021. The 29,000 square foot office achieved both LEED Silver and WELL Platinum certifications, underscoring the company commitment to both environmental stewardship and the health and well-being of our own team members.”

– Lisa Phocus Director of Stewardship, Crescent Communities

Rebecca Sistruck,

OF WORKERS WHO WORK FOR ORGANIZATIONS WITH ESGRELATED GOALS SAID THEIR EMPLOYER'S ESG GOALS MAKE THEM PROUD TO WORK THERE, MAKE THEIR JOBS MORE MEANINGFUL AND MAKE THEM WANT TO STAY WITH THEIR ORGANIZATION

Winter 2023 SHRM People & Strategy Journal

48% GEN ZS

43% MILLENNIALS

NEARLY HALF OF GEN ZS AND MILLENNIALS SAY THEY HAVE PUT SOME PRESSURE ON THEIR EMPLOYER TO TAKE ACTION AGAINST CLIMATE CHANGE

Deloitte Global 2023 Gen Z and Millennial Survey

By Scott Brideau

Risks When Esg Is Not Prioritized

Talent - Organizations that neglect ESG considerations may struggle to recruit and retain skilled employees, leading to talent shortages and increased turnover. A lack of diverse talent can also hinder innovation and limit the organization's ability to adapt to changing market dynamics.

Market Relevance - Organizations that fail to adapt and meet these expectations may find themselves falling behind their competitors and losing out on potential business opportunities.

Reputation - In today's interconnected world, negative publicity related to environmental damage, labor violations, or ethical misconduct can damage a company's image.

Operational & Financial - Failure to address social risks can result in legal disputes, employee unrest, and damaged relationships with local communities. Environmental risks, such as resource scarcity, pollution, and climate change impacts, can disrupt supply chains, increase operational costs, and lead to regulatory penalties.

Key Takeaways

People and environmental needs must come first, or there will be neither. Without people no environment. Without environment, no people

There is power in organizations and leaders’ collective responsibility. Organizations and their leaders hold significant influence and resources that can drive meaningful change in society.

Business Metrics + ESG Metrics = Best Practice Strategy Documenting and reporting measurable impact for people and social and environmental policies is the smart equation strategy.