Desktop Banner

Mobile Banner

The importance of ESG in the recruitment sector

Environmental, social and governance (ESG) is on everyone's lips, but it can feel overwhelming in its scope. After all, it covers an immensely broad set of complex issues. Yet this is a topic that is not going away. ESG is being used more often as a marker of business success, and a new generation is joining the workforce that places it at the top of its list when considering where to begin or continue a career.

What is ESG?

Very briefly defined, the three branches of ESG cover:

"Governance” is used to indicate the method and framework by which any organisation is directed and controlled. This wider idea of governance is critical, because it describes the system of overarching control that allows organisations – and their decision-makers – to:

Where to start with ESG?

In dealing with the scope of ESG and in formulating strategy, the place to begin is with the existing framework for governance (whatever name that goes by):

Of course, if there is no governance framework in place, that’s an obvious place to start. Such a structure will be required before ESG can be meaningfully dealt with (at least in anything but a piecemeal way).

The candidate perspective

Such considerations are vital for recruiters, both in their own businesses and in placing candidates. Research conducted by Nielsen in 2019 found that 83% of millennials – those born in the early 1980s – care deeply about ESG, with the implication that it would influence their choice of employer, and act as a differentiator. Candidates will assess the ESG approach that is taken by any organisation they consider joining, and they will ask questions.

Even beyond those initial conversations, recruitment and retention will require organisations not only to understand ESG as a concept (however wide) and what those terms mean in its own particular context, but also to understand and articulate its stance and contribution to society both to candidates and other stakeholders. That would include existing employees, the communities it operates in, its regulators and its financiers.

This may sound daunting but it need not be. An effective approach to addressing ESG is to switch the focus from specific activities to a more fundamental (re)positioning of the organisation’s values. Rather than focusing on what can be done, organisations are invited to consider what and how activities should be done.

An ESG culture

Central to questions of “should” is the concept of organisational culture – commonly accepted as describing the beliefs, values and accepted standards of behaviour that create the environment of an organisation.

This is not an academic point: the UK Corporate Governance Code, the gold standard for UK governance, states at the outset that it is the responsibility of the board of directors to, “establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned.”

Establishing a culture where ESG is embedded is not as fraught with difficulty as it might sound. Responsible business practices can be built into any organisation’s decision-making if it seeks to regulate and understand its impact through its governance principles. That will promote a culture where:

are all integral pillars of the governance framework.

Why? Because ESG, at heart, is about the impact of organisations on people and the planet. Methods of control that have ethical concerns as a base will, by definition, create an organisation in which people will be keen to work, that has a reputation for taking ESG matters seriously, and which aims for and creates ambitious, real-world change.

ESG solutions

Whether you are just starting your ESG journey, or already have an established strategy, it’s essential that you have the right advice, take the necessary actions and meet all the legal and ESG regulation requirements.

Get in touch with our team today for tailored support to your ESG journey.

authors:tom-proverbs-garbett