• Alexis Pinchin, Director |
  • Liz Hunter, Director |
6 min read

From reducing your carbon footprint to having a positive impact on your community, it’s now vital for your organisation to stand behind a clear Environmental, Social and Governance (ESG) agenda. This expectation doesn’t just come from government-led goals such as the Net Zero Strategy, or the new UK regulatory reporting requirements on climate initiatives.It is, in fact, coming from existing and potential employees – particularly Generation Z – as well as stakeholders and customers.

With this increasing demand in mind, many organisations are taking positive steps in the ESG direction, most notably around the ‘E’, focusing on climate change efforts such as carbon-emissions reduction. Steps can range from reconsidering supply chains to improving packaging, food waste and recycling.

However, leveraging your people  to really drive your ESG agenda, particularly for reaching climate-related targets, is key. There is a groundswell of feeling from employees who want to help their organisations reach these objectives, particularly Net Zero. When your organisation and people are aligned on the same mission and purpose, making a difference is much easier.

The power of your EVP for ESG

One way to rally your people around your climate agenda is by building ‘green’ into your Employee Value Proposition (EVP), and holding your business accountable to your promises.

Your EVP should be an articulation of the holistic offering your employees gain in return for bringing their skills and experiences to your business, and for playing a role in its success. We are seeing that organisations with an EVP including  an ESG-focused mission statement, and climate-related incentives and initiatives, are better at attracting and retaining talent. This is vital amid the current ‘great resignation’ and ‘war for talent’ across the UK. Your EVP will have a big impact on whether people want to work for your organisation or choose another.

But you need to be aware of the perception of ‘greenwashing’. Anything stated or offered in your EVP needs to be supported by action, as employees are also going to be your biggest critics, and will quickly pick up if your actions do not match your words.

EVP incentives and initiatives

To demonstrate action, a good way to look at building your ‘green EVP’ is to think of different ‘buckets’ of incentives and initiatives that you can offer. These can include:

  • Financial incentives: For senior leadership, consider setting performance related ESG metrics aligned to cash or equity rewards. Leadership can make strategic decisions on carbon reduction targets and plan actions to meet them.  Similarly, they can also help to drive Corporate Social Responsibility (CSR), particularly when it comes to policy setting and aligning with charities and projects that the organisation and employees can support together.
  • Operations and processes: Can you incentivise your managers to improve operations and processes for the benefit of the planet? 
  • Core benefits: Every organisation needs to offer pensions, but can you make sure yours are delivered through ethical investors with ESG focused impact funds? If your business requires company vehicles, can you ensure your car fleet is hybrid or electric? Can you incentivise reduction of travel, or explore carbon offsetting opportunities?
  • Elective benefits: If you offer elective benefits such as salary sacrifice for car purchases, can you steer this to green car options? If you offer medical insurance, can it be aligned with a likeminded ESG-oriented organisation? If employees are able to undertake their roles from home,  ), are you able to offer incentives around green energy for their homes?
  • Engagement benefits: Engaging employees and building a culture and community around the green agenda is key to moving the dial, along with education and tangible opportunities to get involved. This can be done with tailored communication, team activities, or with technology tools. For example, perhaps you can use technology apps to encourage employees to share their ride-to-work metrics, to encourage others to follow. Or, employees could track and share their carbon footprint via an app, and compete to reduce it. Perhaps you could offer more leave days for volunteering on climate-related initiatives. 

RAG rating your EVP

You can not only plan to build green initiatives and incentives into your EVP, but it is even better if you hold your organisation accountable to those promises, and make your success as transparent as possible.

An effective way to do this could be to apply a RAG (red, amber, green) rating to your goals. For example, you may be confident that your pensions are ethical, so that box can be marked green. However, if your car fleet is still a mix of diesel and electric, you may rate that as amber, and acknowledge that you have work to do. You might look at your engagement benefits and realise you aren’t doing anything regarding environment related community activities, so you mark those red, along with a plan for improvement.

For an even clearer picture, a measure that could be included in the RAG ratings is employee ‘take-up’. For example, if you have implemented a green investment fund, you could have a green tick. However, if you rate employee opt-in to the fund, it may be slow, and therefore your RAG rating is amber. This measurement could help you see where to focus your internal communications, and what initiatives are resonating.

While potentially confronting at first, the RAG ratings could help you build a map of where you are and where you need to get to, and could demonstrate to your employees and broader stakeholders your commitment to progress.

Real advantages for employees and the business

While the overarching benefit of building ESG into your EVP is for the planet, there are also numerous advantages for your organisation. At a time when skilled talent is absolutely scarce, an ESG-focused mission and value statement, backed with green incentives and initiatives, can be key retention and attraction levers.

Meanwhile, transparent reporting of measurements brings awareness and education, and builds a cycle of continuous improvement. For example, if you report that your car fleet is now environmentally friendly, employees will start demanding that the vehicles that they use during their work day such as trucks are electrified or hydrogen fuelled too, or that their plant machinery is renewable or ethically powered.  It will also put you in a good position for the regulatory requirements which are on the way concerning climate change.

Improving carbon reduction, employee retention and engagement help your business to become a supplier of choice, and to be more attractive to investors as well as reducing your climate risk profile.

Your efforts can also drive external change, such as increasing the market for ethical pension schemes or electric vehicles. To enhance this broader impact, you can go a step further and ensure that any providers used as part of your employee benefit offerings adhere to a minimum green-credentials criteria.

Bringing it all together

Organisations have been offering many green initiatives and incentives, but the new demands mean there is a need to bring this content together, to elevate it, and make it transparent to employees and stakeholders. Failing to offer a green EVP means many people will vote with their feet and not choose your organisation.

Even if your employees are not yet demanding it, there is a responsibility for organisations to take the lead on green initiatives, and there is opportunity to promote awareness and help people understand that carbon reduction is a collective issue that needs numerous approaches to solve. Bringing it all into the EVP makes it obvious and easy for people to engage with.

Becoming greener needn’t cost more. Identify the savings from your green reward and benefit policies such as salary sacrifice, paper and printer-ink reduction, and less travel, and redeploy that spend for better impact via new investment, whether that is electric charging points in the site car park, or a donation to a reforestation project.  

Again, remember that ‘greenwashing doesn't wash’. People are looking for tangible action that they can see, feel and experience in your organisation. Delivering this is a win-win for your organisation, your people, and importantly, the planet.