Four top ESG trends that will make 2022 a year for employee engagement.

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Uncertainty is rife in the world, but one thing that is clear is that a changing climate and the global necessity to cut carbon emissions will lead to transformations in our world that will affect all parts of society. It will transform businesses and change the way we live. These nascent changes are starting to gather momentum, and we expect them to accelerate in 2022.

As a result, not only are companies forming strategies to cut their own greenhouse gas emissions they are also seeing the necessity to engage staff on sustainability. There are 4 key trends which have grown significantly in 2021, and which we expect to take centre stage in the corporate world in 2022. As a result, we expect to see a significant growth in employee education and engagement on sustainability.

Employee demand is driving action

Concern over climate change is at its highest for decades[1]. There has been a combination of factors which have fuelled concerns in 2021 including floods, famines and wildfires across the globe. This growth in extreme weather events, combined with a new report from the Intergovernmental Panel on Climate Change highlighting the urgency of the climate crisis, followed several months later by the COP26 climate conference in Glasgow, all contribute. There is now a growing sense of unease across populations that we have to take action at scale, fast. By November this year climate and the environment were cited as Britain’s biggest concern, ahead of the pandemic, in an Ipsos-Mori poll.[2]

This increase in concern is driving demand from employees for more knowledge on sustainability and in particular, more and more people want to know what they can do themselves to address the climate crisis.

Connect this demand with an increased focus on staff welfare over the last few years, and we are seeing heightened demand that businesses take meaningful action on climate change. As a result, employee sustainability programmes are often being pioneered by staff, and because younger generations typically have a stronger interest in environmental issues, these staff are often millennials or Gen Z.

Top of the Boardroom agenda

Pressure is also coming through the Boardroom too. Increased climate risk, mandatory reporting, combined with external pressure from investors, clients and customers are making it a key priority for more and more Boards. As sustainability and ESG climb the Boardroom priority list, increasing numbers of companies see employee engagement as a crucial part of delivering results in this priority area. With an engaged workforce, it is far easier to make the changes in a business required for a net zero future. Employee engagement is proving particularly popular with professional services firms who are seeing increasing numbers of client conversations focusing on ESG. Staff need to be equipped to deal with these new demands too.

It is also a very cost effective way to drive carbon reductions beyond the value chain, as frequently combined employee carbon footprints can be up to ten times larger than operational footprints.

The pandemic effect

The blurring of boundaries between home life and work lives, and the new normality of seeing our colleagues on screen while sat in their home surroundings, has meant that companies now feel comfortable in helping staff consider sustainability in their own private lives. In turn staff are comfortable to share some information with employers in terms of sustainable lifestyle choices. And of course, habits at home often transfer to work and vice versa, so employers are enjoying the benefits of a more sustainably minded workforce.

In addition, home working is now becoming a material part of the corporate carbon footprint. Pre pandemic, this was not the case. This is witnessed by the minimal focus given to home working in the GHG Protocol, which provides a global framework for corporate carbon reporting. However, many companies are now facing the challenge of part of their scope 3 (indirect) emissions reporting requiring data that they don’t currently have due to home working.

As homes become the office for many, companies are also seeing the benefits of offering programmes which provide an extra connection and training around an important issue.

Data opens new opportunities

The mantra ‘if you don’t measure you can’t manage’ has long resonated in companies when it comes to their own operational carbon footprint. This was pioneered by CDP over the last 20 years and more recently by the Taskforce on Climate -Related Financial Disclosures. As a result of companies seeing the transformational benefits of this approach, they are using new opportunities to help staff measure, track and reduce personal carbon footprints. This is now providing a quick win, low cost way for companies to engage staff on sustainability through their own lifestyles.

Add to this teams, challenges, competitions, collective carbon savings and badges, we see many people showing a new interest in sustainability, driven initially by the excitement of competition. Combine this with a structured engagement programme, and the result is a far higher level of engagement, reaching new parts of the workforce, than is typically seen in employee engagement offerings.

We find it inspiring for individuals, and empowering to see the collective effort as well

Diane Burt, Director, Arup

Our colleagues have embraced the opportunity to learn how even small lifestyle changes can impact their personal footprint and they’ve had some great fun along the way!

Madeleine Goldin, Associate Director, Asset Finance, Client Products at Lloyds Banking Group

So, the combination of growing demand from staff and boardrooms, as well as an increase in extreme weather events in 2021 suggest that employee engagement on sustainability will become more and more mainstream in 2022. We are also seeing strong indicators that this will be cross sectoral. As soon as a company makes the decision to commit to ESG and sustainability, it is crucial that staff are part of that evolution. Combined with pressure from Gen Zs and Millennials, we expect it to become a key component of sustainability strategies from forward thinking companies in 2022.