Contributors: Manwen Shen, Resource Coordinator, Wellness Works Canada and Victoria Grainger, Founder, Wellness Works Canada
Stakeholders in a company such as investors, customers, suppliers, partners and employees are increasingly interested in a company’s sustainable operations. Having an Environmental Social Governance (ESG) plan as a part of your organization’s workplace health and performance strategy will help to ensure that environmental and social values of stakeholders are aligned. This article reviews what exactly ESG is and what organizations can do to support sustainability. Investing in ESG is a good risk management strategy and it also leads to improved workplace health and performance.
So what is ESG?
Environmental social governance is all about operating a sustainable organization. It is broken down into three components.
The environmental perspective refers to an organization’s impacts on the environment and risk management in terms of pollution, natural resources management, and the resiliency of the organization against physical climate risks.
The social perspective refers to the relationship between an organization and its stakeholders. The stakeholders measure a company by looking at its Human Capital Management metrics and impact on the communities and supply chain partners. It can include having strategies in place to deal with sexual harassment, discrimination, DEI, employee mental and physical wellness, customer experience, working conditions, and workplace culture. Respecting human rights is an important factor in social risk management.
Governance refers to the way that leaders manage an organization. ESG focuses on stakeholder expectations, shareholder rights, and promoting transparency and accountability by leadership. Ensuring there is diversity in board members and senior leadership and overall solid diversity, equity and inclusion practices are important factors that support healthy, sustainable governance. These are also critical components of a workplace health and performance strategy.
Being Environmentally Conscious is a Good Risk Management Strategy
Nowadays, more and more businesses focus on the triple bottom line - profit, people and the planet. Minimizing your organization’s negative impacts on the environment can decrease operational costs and increase trust from all stakeholders. To gain this trust, business leaders can invest in safe healthy working conditions for their people, and work to improve energy efficiency and limit greenhouse gas emissions. Here are a few quick wins.
Quick Wins to Reduce Carbon Emissions
Encourage remote work (where feasible)
Take advantage of vehicles with clean power (if applicable)
Install energy-efficient LED light bulbs
For larger organizations, arrange energy awareness training
Set and achieve performance targets for reducing negative impacts on climate change and safe, healthy working conditions for employees
Being able to illustrate the management system and assign responsibilities to senior management is important. You can check energy data regularly and put effort into the integration of energy efficiency and operator actions.
Quick Wins for Social Risk Management
Provide personal growth and innovative learning opportunities for employees
Offer sexual harassment and bias training
Incorporate DEI factors into recruitment strategies
Ensure pay equity
Invest in employee healthcare programs
Encourage proper nutrition by creating a healthy eating environment at work
Provide opportunities for physical activity during company time
Donate and/or provide volunteer opportunities
Use the psychological health and safety standard to minimize psychological health and safety risks while promoting positive mental well-being
Don’t Overcomplicate It, But Do Take a Strategic Approach
The key to sustainable operations is accountability and shared ownership. An SME or even a large organization may not need a whole new strategy - but rather, best practices and ESG risk can be managed by incorporating it into your workplace health and performance strategy.
Include ESG in your annual assessment by reviewing employee perceptions and needs, stakeholders' expectations, best practices, and social aspects of your operations. For large organizations, recruit staff who are specialized in ESG risks and issues.
Communicate assessment results to all stakeholders impacted and engage them to develop relevant actions into your workplace health and performance implementation plan ensuring shared accountability.
Review or develop any sustainability policies (or amend current policies or values) to demonstrate the aims and principles for managing ESG issues.
Incorporate ESG into training programs for leaders and employees in alignment with values and policies. Make sure the training programs are accessible to everyone in the organization.
Evaluate and Innovate by holding leaders and employees accountable to ESG policies as a part of your workplace health and performance evaluation strategy. Make sure there are quantitative and qualitative KPIs with clear measures of success. Innovate and adapt as needed and finally, communicate and celebrate success related to ESG goals. If your organization invests in ESG reporting, make sure to include relevant workplace health and performance strategies into it.
Investing in sustainable workplace practices to align with the values and needs of all stakeholders is an important component of workplace health and performance strategy. If you are looking for support or further resources to support sustainability in your organization, reach out to a member of our team at firstname.lastname@example.org.
About the contributors:
Manwen is a fourth-year Bachelor of Kinesiology student at the University of Alberta. Her major is physical activity and health. She is currently doing her practicum in Wellness Works Canada, and her role is resource coordinator. Her next pursuit in her career is community wellness and health promotion. Besides her studying and working, she is interested in bodybuilding, planting and painting in her free time.
Victoria is a passionate advocate for the impact well-being has on performance. She is the founder of Wellness Works, a non-profit that empowers, educates, and supports practitioners and employers in building healthy, high-performing work cultures.
Her expertise is in creating environments where people and business thrive. She has an MBA and BPE and is a Personal Trainer Specialist, Nutrition and Weight Loss Coach, and Triathlon Coach.
Ashton, Carrick. “Small Businesses and the Potential Benefits of ESG.” Barton LLP. January 4, 2022. https://www.bartonesq.com/news-article/small-businesses-and-the-potential-benefits-of-esg/.
Forbes. “Council Post: 14 Smart Ways for Companies to Incorporate ESG into Their Branding.” Feb 14, 2022. https://www.forbes.com/sites/forbescommunicationscouncil/2022/02/14/14-smart-ways-for-companies-to-incorporate-esg-into-their-branding/?sh=15d7b54b7992.
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Peterdy, Kyle. “ESG (Environmental, Social and Governance).” Corporate Finance Institute. Updated June 2022. https://corporatefinanceinstitute.com/resources/knowledge/other/esg-environmental-social-governance/
Spitz, Karlheinz, John Trudinger, and Matthew Orr. Environmental Social Governance : Managing Risk and Expectations. First edition. CRC Press, 2022. https://search-ebscohost-com.login.ezproxy.library.ualberta.ca/login.aspx?direct=true&db=cat03710a&AN=alb.9921348&site=eds-live&scope=site.
Wellness Works Canada. “5 Step Guide Accompanying Checklist.” Accessed July 2022. https://www.resources.wellnessworkscanada.ca/_files/ugd/ee4768_34e17f8e04014889892b7ff5d22f9683.pdf