How HR drives corporate sustainability

Nurturing people, nurturing planet: How HR drives corporate sustainability

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Secure the future of human capital.

Several years ago, the United Nations Intergovernmental Panel on Climate Change (IPCC) gave humanity a daunting task: reduce greenhouse gas emissions by 50% before 2030 to avoid the most severe effects of climate change. As we inch closer to that deadline, it becomes evident that achieving these targets requires the collaboration of every sector, with the business world playing a pivotal role in the sustainable transition. 

Within this spectrum, the Human Resources (HR) and recruitment industry, valued at a whopping $762 billion and employing over 10.4 million individuals globally, emerges as a major influencer on global GHG emissions. The future of work will depend on HR’s active involvement in sustainability for several reasons. This article explores the responsibilities and benefits of sustainability for HR leaders. 

The role of Human Resources (HR) in sustainability

You may wonder, why HR? Historically, HR was the go-to for recruitment, training, and personnel management. However, the dynamics have evolved. Today's HR leaders are not just custodians of talent but also ambassadors of organisational culture while fostering change, diversity and inclusion. They have the unprecedented task of weaving sustainability into the fabric of a company's ethos, from hiring to policy-making. 

Such integration doesn't only serve an ethical or environmental purpose but also aligns with tangible commercial benefits:

  • Talent dynamics: Research from Deloitte underscores that significant proportions of Gen Z and Millennial workers factor in organisational commitment to sustainability when deciding job longevity. 40% of respondents have reported that they have already changed jobs due to climate concerns, or that they plan to change jobs because of climate concerns.Catering to this sentiment ensures leadership stability and streamlines recruitment.
  • Thus, Gen Zs and millennials continue to demand greater climate action from their employers and believe some have deprioritised sustainability strategies in recent years. They also see a critical role for employers to provide the necessary skills training to prepare the workforce for the transition to a low-carbon economy. 
  • Consumer behaviour: A shift was observed between 2021 and 2022, with an 8% increase in consumers willing to pay a premium for sustainable products. With 88% reviewing sustainability credentials before a purchase, sustainable businesses have a competitive advantage. 
  • Stakeholder perspective: Ignoring sustainability could translate into legal and profitability challenges. Conversely, businesses incorporating decarbonisation into their ethos find favour with stakeholders, enjoying consistent profits.

Given the prevailing trends, HR's pivotal role in guiding businesses toward sustainable practices cannot be overstated. They are instrumental in shaping the present workforce and charting the future course of enterprises.

What is green HR?

Green HR, a term introduced by Walter Wehrmeyer, refers to HR policies focused on preserving natural resources. The primary objective of green HR is to promote environmental consciousness and contribute to an organisation's socio-economic well-being. 

Green HR’s benefits include: 

  • Spreading green values across the employee base.
  • Instilling eco-friendly behaviour. 
  • Enhancing commitment to sustainability. 
  • Amplifying the company's positive public image. 
  • Attracting potential job seekers.

Strategic benefits and challenges of embracing sustainability in HR

Benefits of sustainability integration for HR

  1. Talent acquisition and retention: Sustainable HR practices are more than just an attractive proposition—they act as a magnet for top-tier talent. Implementing these practices reduces recruitment costs, fosters increased loyalty and responds to the modern workforce's discerning preferences. A 2021 Gallup poll underscored this, revealing that 70% of US workers take into account a company's environmental footprint when considering job opportunities.
  2. Consumer trust and brand loyalty: The contemporary consumer market is astutely aware and informed. Brands that visibly prioritise sustainability win not only consumer trust but also loyalty, paving the way for enhanced market positioning and competitiveness.
  3. Financial resilience: While transitioning to sustainable practices may require an initial investment, the long-term financial returns are undeniable. These returns come not only in the form of positive growth but also in the avoidance of potential pitfalls like regulatory fines and the loss of trust from both consumers and potential employees. In fact, the World Economic Forum's research found that companies with a robust sustainability strategy can expect an average annual growth rate of 15%.

Challenges and risks

The pressing demand for sustainability from both consumers and the workforce presents challenges for companies that are slow to adapt. Recruitment agencies, in particular, are now tasked with showcasing sustainable values, not just in their external offerings, but in their internal policies and practices. This transformation isn't just about attracting top talent—it's about avoiding significant financial repercussions. To emphasise the stakes, a study showed that incidents related to ESG concerns can cause an average market capitalisation loss of 6%

Future opportunities for HR in sustainability

Companies that proactively weave sustainability into the fabric of their HR and recruitment processes are poised to harness a wealth of opportunities. Aside from the direct financial advantages and enhanced operational performance, there's a broader impact at play. HR departments, backed by sustainable practices, have the chance to shape the very essence of modern workplaces, guide the trajectory of businesses, and contribute to meaningful, lasting changes in the fight against environmental degradation. 

In this evolving landscape, the narrative is clear: sustainability isn't just an ethical choice—it's a strategic imperative.

How to incorporate sustainability into HR & recruitment processes 

Driving sustainability is not just about the big picture; it’s also about the granular, day-to-day operations. Here are ways HR and recruitment can make a difference: 

  • Embed sustainability in your core values: Position sustainability as a central part of your mission, values, and brand. Make it evident across all company communications. 
  • Engage with candidates about their environmental passions and ensure alignment with the company's goals. 
  • Embrace digitalisation: Harness the power of virtual hiring, cloud-based systems, and digital documentation. Such steps not only save resources but also massively reduce the carbon footprint through lowered travel and minimised paper use. 
  • Cultivate climate consciousness: Training hiring managers to emphasise the company's green initiatives can be pivotal. Candidates should not only be informed but also feel like they can be part of the company's green journey. 
  • Avoid greenwashing: While it's essential to advertise your eco-friendly initiatives, authenticity is vital. Avoid misleading or exaggerated environmental claims. 

The shift towards sustainability is not a fleeting trend—it's the future. HR and recruitment sectors stand at a crossroads where every decision can catalyse lasting change. Embracing this responsibility can ensure that businesses thrive economically while championing planetary well-being. The time to act is now.

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