Most business leaders want the social aspect of their environmental, social and governance (ESG) strategy to focus on employee wellbeing over the next 12 months, according to business management consultancy HarknessKennett.
The firm’s study of UK business leaders found that just four out of 10 say that employee experience, culture, and purpose, which have all been recognised as important factors in wellbeing, are integrated into the social aspect of their ESG considerations.
However, nearly 57% express a desire for their organisation’s ESG strategy to be focused on prioritising employee wellbeing. This is followed by diversity and inclusion, at 37% and 34% respectively, and even traditional elements such as community involvement at 26%.
One in five leaders (22%) acknowledge that their current ESG strategy fails to consider employee interests, even though 61% of them use employee insights to inform their ESG strategy. Employee engagement and satisfaction surveys are the most common methods for getting insights from employees.
HarknessKennett associate Suzanne Clarkson said: “Employee wellbeing as the foundation of S in ESG strategy makes perfect sense when you consider the view that if you get the employee experience right all the other S in ESG elements can be built on top of that; such as customer experience and community involvement.
“However, while this research shows that employee wellbeing might be considered an important part of S in ESG strategy by the majority of leaders, employee experience, culture and purpose are not. This mirrors an important disconnect highlighted over recent months by various industry bodies and academics, which are leading an evolving movement for organisations to focus on fixing work, not just on fixing the individual.
“S in ESG might well become the vehicle that helps accelerate this movement, getting wellbeing firmly on to the board agenda; as both an outcome of a supportive, purpose-driven culture and as a contributory factor in recruitment, retention and productivity. But wellbeing is subjective. And disconnects will arguably continue to feature if it’s not informed by employees.
“Once-a-year engagement or satisfaction surveys provide useful indicators, but they need to be underpinned by an environment that creates the ongoing conditions for employee voice, to ensure that genuine contribution and challenge by employees is an inbuilt feature of working life.”