Pay it forward with a greener agenda at work

Linking profit to purpose is powerful for employers and staff

Economists no longer see ESG and shareholder profit as mutually exclusive.

Happily for some and much to the dread of others, we are entering a new era of societal behaviour which will demand hyper-transparency and an expectation from consumers to know what they are buying and from what type of company.

The Environmental, Social and Governance (ESG) standards are planted firmly in the public consciousness.

A diluted cousin of the ESG was the corporate social responsibility (CSR) or sustainability agenda of the 1990s.

CSR was often a box-ticking exercise and sustainability was just a token gesture. Both offered a small public gesture to society but operated far from scrutiny behind the scenes when a company may have been polluting a local river or clogging up the road network at rush hour.

ESG provides a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of nature.

Social criteria examine how it manages relationships with employees, suppliers, customers and communities. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.

Economists no longer see ESG and shareholder profit as mutually exclusive.

The ESG agenda has shown to pay dividends and money flowing into ESG funds has outpaced growth into both US and European equity funds over the past 12 months.

If this all feels a little bit detached from you as a small business owner, farmer, manager of an SME in product or service provision or even a pharmaceutical company, let’s look at how you might start moving towards the ESG agenda.

Define your purpose as an organisation

You may have started out small with big ambitions: to create a product or service which happened to make you an income. However, as businesses begin to get larger and more complex, purpose is replaced by profit.

The owner or manager no longer walks in the shoes of the customer.

Rediscovering purpose, such as a florist “providing the best quality local and sustainable flowers for customer enjoyment”, ensures that a customer has a feel-good factor when purchasing the product for just as competitive a price as a bunch of imported tulips from the Netherlands.

Value your workers

Are you so focused on profit and surviving the pandemic that you are working your people into an early grave? There are different ways to rise to the challenge during times like this.

Ask them how you and the organisation should adapt. Pay them fairly and trust them. Offering a tick box mindfulness session or lunchtime yoga is poor compensation for extortion of their minds and health.

Examine your supply chain

Do your raw materials come from a sustainable source? Ask questions of agencies who provide you with services, such as cleaning or call centres.

What about your waste disposal company? Are they licensed to properly dispose of your waste or do you try and save money and not ask any questions as to where it ends up? It is your responsibility to visit and audit every aspect of your supply chain to ensure that you are not complicit in funding illegal activities.

Your locality

When was the last time you did something for your community? Not just throw some funds at something, but properly examine local needs and how your organisational capabilities can step in.

Are you stepping over a homeless person on your way into your shiny office every morning and figuring that he or she is someone else’s problem?

What can your IT department do beyond their remit of servicing your laptops?

Do local children from deprived homes need laptops for home-schooling which are merely discarded in your offices?

Legacy

Ask yourself: What do you want your firm to be remembered for?

The legacy of Guinness Brewery, for example, has left an indelible mark on the subsequent generations of those who lived in the area.

It included employee welfare schemes, provision of public recreation areas and restoration of St Patrick’s Cathedral.

Think about what you can do, beyond keeping the company afloat or making handsome profits.

These are the types of activities which will both attract people to your product or service and which will pay itself forward in so many ways.

You can document your ESG achievements on the Ireland's Hub for Sustainable Development Goals, a collaboration platform for reporting on progress towards Ireland’s goals.

The country’s progress against each goal is measured using a set of UN global and EU agreed targets and indicators.

Kerrie Fleming is an IMI associate faculty member and programme director of the MSc in Management Practice. Her work has been featured in Forbes, the BBC and her leadership research is presented in her Hult TEDx talk.

Learn about the MSc in Management Practice at IMI