Creating an Employee Engagement AND Happiness Strategy
How to Develop Your ESG Strategy to Set You up For Success
ESG is increasingly important to employees, customers and investors - and rightly so! It’s something that we see more and more HR teams focusing on to help support organisational growth, culture and performance. But how can you develop an ESG strategy? We’ve broken the process down into steps to help get you started.
We all know the benefits of ESG investment are wide-ranging and impactful. But to get the most out of your investment you need to make sure you can develop a strategy to get you to a successful programme.
Dive into why you’re investing in ESG. There are lots of benefits to investing your time and money into ESG. Whether you’re looking to make your organisation more sustainable, more attractive to employees or investors, or more appealing to socially and environmentally conscious customers. It might be that you have seen the research that shows that investments in ESG provide high ROI and can impact your top line and profits. Any of these are great reasons to start taking your ESG programme seriously. You need to understand what your motivations are and what you’re trying to achieve. This will enable you to target your strategy in the right way - to get the most out of your time and money.
Set clear goals and markers of success. Once you’ve identified what success looks like, you can set goals and a roadmap of how you are going to achieve this success. This will give you a clearer idea of where to focus your attention. ESG covers a really broad range of potential actions, and this means there are almost infinite ways to reach success. By having a very clear set of goals, milestones and roadmaps, you will be able to ensure you pick the right places to start and the trajectory that’s best going to suit your organisation.
Identify a framework that suits your organisation. There are many ESG frameworks set out by different organisations. The reason we recommend waiting to decide on which one to utilise until you have a clearer picture of what you’re trying to achieve is that you will then have a better idea of which will be best for your specific situation. Once you’ve picked your framework you may need to slightly adjust your goals, but if you’ve picked one that aligns closely with your values and ideas, then this shouldn’t require major work. By contrast, you don’t want to retrofit your aims to someone else’s framework. At THI we find the MSCI ESG ratings to be a robust and transparent framework that works well for a lot of organisations. If you need a place to start, this may be one that will work for your organisation. In fact, we liked it so much that we used this framework to build the basis of our ESG survey.
Set up an action group. Some things are better together, and we think ESG is one of them. We recommend up an action group of key stakeholders and interested investors, employees and potentially key clients depending on your organisation. This will allow you to ensure cross-organisational buy-in and also bring new and creative ideas into your programme. This will help to create a programme that is attuned to your whole organisation but also spread the time investment across your team. Plus, you’ll have evangelists for your programme throughout your organisation, which will help with the communication aspect (which we’ll get to later!)
Listen to your team. Although having a small group of dedicated enthusiasts is invaluable, it’s also important to listen to everyone in your organisation. This is because understanding where everyone is coming from will help you design a programme and communication strategy that will bring everyone along. Understanding everyone’s values will also be helpful. For example, you might find you have a higher number of people who don’t place importance on climate change than you had expected. Or conversely discover that most people in your organisation care deeply about reducing waste. This will help you to understand where you will need to work harder to keep people on side, and where there might be easier wins. It’s also likely that certain functions or teams will have a greater understanding of where significant improvements may be made, or where there are constraints. Your IT team may be able to identify areas where you’re able to reduce your reliance on draining servers for example, or tell you that these savings are unobtainable for your organisation.
Identify easy wins. At this point, you should have been able to identify areas where you can make easy wins. These short-term goals will really help you to get your programme moving and create buy-in across your organisation. Being able to share wins quickly will not only move the dial on your goals but will also create buzz and excitement around your programme within your organisation.
Set bold stretch goals. However, it shouldn’t all be easy wins or small efficiencies, understanding what your bolder goals look like, what roadblocks might come up, and creating contingencies and plans for these will be key to ensuring your programme isn’t seen as a box ticking exercise. Of course, as with any major changes it’s really important to get your communication strategy right both internally and externally to help support people through the change.
Develop your communication strategy. Your ESG communication strategy can be the thing that makes or breaks the success of your investment. That’s why we think it’s worth considering separately and at length. You must be transparent and honest about changes, how they will impact different stakeholders and when you think these ramifications will be felt. Whether they’re positive or negative, many people struggle with change, so taking the time to do it right can make or break your strategy.
Build feedback into the system. It might seem obvious, but seeking feedback from a variety of sources will be really important to making sure you’re still on the right path with your ESG strategy. Although your ESG framework will help you to measure your impact, it’ll tell you more about your journey than your destination. That’s why we think listening is so important. Our ESG survey can help you do just that. You should also consider consulting your customers and investors. This will make sure you’re having your desired impact across the board relative to your initial aims and goals.
Regularly review progress & update your strategy. All of this insight should not be taken as data for data’s sake. To get the most out of all your activity you must regularly assess your progress against your aims and goals. This will make sure that you’re not investing time and money into things that aren’t working and will help you remain agile. Not only this, but it’s also important to remain flexible with your whole programme. For example, you might find that your stated aims actually no longer apply to your organisation. When this happens, the sunk cost fallacy might lead you into thinking you need to push on regardless. However, remaining reactive to the situation will help you keep track of your return on investment and reduce the chance of stagnation.
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