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Does your organisation have the “S” factor?

The global pandemic has highlighted social inequalities and fundamentally changed the role employees expect their employer to play to address these issues, argues executive coach Geraldine Gallacher.

Geraldine Gallacher
September 2020

A company’s Environmental Social and Governance performance has mattered to employees for some time.  Where previous generations have tended to focus on environmental issues, social factors are becoming increasingly important for Gen-Z.  Over one billion of whom will have joined the global workforce by 2030.  That’s not to say that concern for environmental issues has diminished, rather, recent events have raised the profile of the ‘S’ factor.  

Employees are looking closely at how employers have or have not supported their employees through Covid-19, and their response to the Black Lives Matter movement.  As well as other ‘social’ performance indicators such as the Gender Pay Gap, Ethnicity Pay Gap, Women and ethnic minorities on boards.  While the job market is volatile it’s unlikely that many employees will be job hunting.   In a couple of years however, when the economy has picked up, you can bet those that have put up with working for an employer with a poor social reputation will be the first on LinkedIn.  Who wants to progress their career with an employer that has a poor social track record?

Employers should avoid jumping on the current green/whitewashing/virtue signalling, bandwagon without the evidence to back up their ESG claims.  Employee activism is on the rise.  Employees know what’s real and will call out claims that don’t match their lived experience.  

ECC’s not for profit organisation, The Good Business Initiative (GBi), recently conducted an experiment to test how easy it is for prospective candidates to find information on an employer’s ESG performance on their website.  Our researchers searched company websites on the Times Top 100 Graduate employers list as a prospective candidate would, looking for 13, pre-defined, ESG indicators.

While a handful of employers actively market their ESG credentials to candidates our researcher found that it is hard to find this information on the majority of websites.  Even when the data is provided it can be hard for a potential candidate to make head nor tail of what it means.  Talent leaders can take some simple steps to improve access and visibility.  Make sure the data is included on the organisation’s website and is presented in a way that is easy to understand.  It’s critical that employers talk about what they have achieved rather than issue wafty statements about future aspirations.  Even better include employee voices to verify the company does what it says.   

Prospective candidates and existing employees are right to be concerned about an employer’s ‘S’ rating.  A recent Harvard study found it serves as a barometer for corporate culture.  ‘S’ practices tend to be strong in companies with a strong and shared culture, while those with toxic cultures score low.  At a time when boards are concerned about the sustainability of their workforce, ESG values must drive business recovery

Geraldine Gallacher, Founder and CEO, ECC

London Accountant

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