Hays Journal 20 – How to build sustainability into your organisation’s COVID-19 recovery

Hays Journal 20 – How to build sustainability into your organisation’s COVID-19 recovery

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  GETTY IMAGES 9 ANALYSIS AT THE ENDOF 2019, ESG MOMENTUM AROUND THE WORLD WAS STRONG – ESPECIALLY WITH REGARD TO IMPROVING THE SUSTAINABILITY OF MANY ORGANISATIONS. BUT THEN CAME COVID-19, FORCING MANY BUSINESSES INTO SURVIVAL MODE. AS THE WORLD RECOVERS, HOW CAN BUSINESSES ENSURE THAT BEING GREENER MOVES BACK UP THE AGENDA? SUSTAINABILITY AT THE CENTRE 9
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  10 Velatia, says thatmany companies’ sustainability operations took a hit as a result of having to go into survival mode. “The impact caused by the Covid-19 crisis had negative effects on businesses, which have had to make decisions that, due to the urgency of managing the impact of the virus on the life of the company and from the economic point of view, are sometimes not entirely sustainable.” For example, many organisations have had to introduce new rules that require colleagues to wear personal protective equipment, such as masks and gloves. While essential to keep people safe, many items are disposable or single use. However, Ryan Swenson, Head of Sustainable Development at Australia’s Officeworks, points out that sustainability reduction in some areas does not have to result in an overall reduction in sustainability performance. “The health, safety and wellbeing of team members and customers must remain the first priority, but this doesn’t mean sustainability practices have to be compromised,” he says. Despite the new demands on workers, in October 2020 Officeworks was still able to launch its Positive Difference Plan 2025 – a five-year strategy for the team, community and environment – and has continued to progress towards becoming a zero-waste business and its net zero goal. So as organisations look ahead, how can they ensure that sustainability moves back up their agenda and forms a part of their recovery? Zabala believes that it is important that businesses which have discovered more sustainable practices don’t revert to old habits when they reach the other side of the pandemic. “In those cases where the crisis is having a positive impact on more sustainable management in terms of ESG, businesses should consider maintaining these changes by identifying their sustainable purpose and the profitability associated with better and greater sustainable management,” he explains, adding that increased public awareness of the need for sustainability will “make it easy, not only to return to some sustainable practices but also to develop many others.” For example, the pandemic has also seen a significant reduction in business travel, which normally accounts for 12 per cent of global transport emissions, equating to 915 million tonnes of CO2 in 2019. Yet during the pandemic, there has been an unprecedented reduction in overall air pollution of up to 60 per cent, which takes into account not only international travel but the daily commute, too. This has been made possible because remote working, something that wasn’t available across the board before the pandemic, has been forced upon employers and employees, who are utilising programs such as Slack, Zoom and Teams to continue to work effectively. 10 OVER THE PAST FEW YEARS, businesses have learned that attracting and retaining customers and employees alike goes hand-in-hand with reporting on and showing a commitment to making a positive impact on sustainability and society, otherwise known as environmental, social and governance (ESG). Sustainability in particular has been moving up the agenda for many businesses, in an effort to attract both customers and talent. A 2020 IBM study found that 71 per cent of consumers surveyed indicated that traceability of products is very important to them, and that they are willing to pay a premium for brands that provide it. Meanwhile, HSBC’s 2019 Made for the future report found that 24 per cent of organisations said that one of the driving forces behind their investments in sustainability is to improve their ability to recruit and retain the best people. Organisations have been responding accordingly. Just before the pandemic hit at the end of 2019, the proportion of S&P 500 firms reporting on their ESG performance surged to 90 per cent, from 20 per cent in 2011. Meanwhile, KPMG’s Survey of Sustainability Reporting 2020 has revealed that 80 per cent of companies now report on sustainability, compared with just 12 per cent when the consultancy began tracking sustainability reporting in 1993 The consultancy’s latest report surveyed 5,200 companies in 52 countries. Also in 2019, the European Commission launched the European Green Deal, which aims to make Europe the first climate-neutral continent. But then Covid-19 hit. Would a pandemic pause, slow or completely halt sustainability progress? REBUILDING SUSTAINABLY Patxi Zabala, Director of Corporate Social Responsibility at Spanish industrial and tech company “WELLBEING OF TEAM MEMBERS AND CUSTOMERS MUST REMAIN THE FIRST PRIORITY, BUT THIS DOESN’T MEAN SUSTAINABILITY HAS TO BE COMPROMISED” RYAN SWENSON, OFFICEWORKS
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  CAPTIONEVEROVID MAIO BLA IUMCONSEDIS EXERUM ACCUM QUIBUSAE CUSANIST, ILLAM AUT ODICIPIT, EAQUE VELECTO QUE RAE PORRO DOLOREM AS SOME ORGANISATIONS WILL CONTINUE TO WORK REMOTELY, EVEN AFTER THE PANDEMIC 11 11 A global survey undertaken by Slack in October 2020 revealed that 72 per cent of people would prefer a mixture of office- and remote-based working, with just 12 per cent wanting to return to the office full time. Furthermore, some businesses (including Deloitte and PwC) have already gone on record to say that sustained business travel reduction will form part of their ongoing plans to reduce emissions to net zero. A CHANCE FOR CHANGE For Professor Dr Laura Marie Edinger-Schons, Chair of Sustainable Business at Germany’s University of Mannheim, there is hope that these newfound sustainable practices will remain the norm. “Research on sustainable behaviours has repeatedly shown that it is very hard to change habitual behaviours and routines,” she explains. “Thus, this unexpected disruption of our normal work-related behaviours offers a great opportunity for permanent change.” She also adds that many unsustainable practices as a result of the pandemic can be once again removed from business when the pandemic is over. “During the pandemic some industries were forced to use more unsustainable business practices, for example due to an increased delivery of products or use of plastic packaging; however, many of these will not be necessary anymore after the pandemic.” Companies can also look at ways to make commuting into work – wherever that may be in the future – more inclusive and sustainable, with nearly 25 per cent of employees having left a job because of the commute. Organisations can look to subsidise commute costs and provide alternatives to company cars – which have been shown to increase household vehicle use by 25 per cent – such as cycling schemes. Businesses can also take the opportunity to revisit supply chains; for example, companies can indirectly become more climate resilient and fairer to society and individuals. “We can achieve more through collective action than as a single organisation, so collaboration with many of our stakeholders, including suppliers and government, is really important,” says Swenson. IKEA’s supplier code of conduct, for example, requires that suppliers meet their standards in areas including working hours, employee benefits and wages, chemicals, waste, business ethics, the environment, ALAMY
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  12 COULD THE GROWING POPULARITYOF ELECTRIC CARS REDUCE EMISSIONS CAUSED BY COMMUTING? “EMPLOYEES WANT THE COMPANY THEY WORK FOR TO BE PURPOSE-DRIVEN, TO BE ON THE RIGHT SIDE OF SUSTAINABILITY AND TO FEEL THEIR VALUES ALIGN WITH THOSE OF THE COMPANY” MEGAN KASHNER, NORTHWESTERN UNIVERSITY child labour and discrimination before IKEA will consider working with them. Meanwhile, German sporting goods company Vaude has engaged with the German Government and stakeholders to co-create the ‘Grüner Knopf’ (the green button), a sustainability label for its textiles. These sorts of initiatives are requiring companies all over the world to be more transparent, which will lead to more companies needing to identify their own supply chain risks, something The Sustainability Consortium (a global non-profit sustainability organisation) is helping companies – particularly those with limited supply chain knowledge – to do through its commodities mapping tool, which addresses where the risks are, what the risks are and how these issues can be addressed. SHARING RESPONSIBILITY Within business, however, it’s not just down to the upper echelon to encourage change. “It’s everybody’s responsibility to question the status quo and to participate in rebuilding and shaping our economy of the future. Of course top managers have greater power to change structures and processes, but employees are an equally important driver of change in organisations,” says Edinger-Schons. “And for those privileged few of us that are not facing existential threats due to the pandemic because we have secure jobs, I would say that our responsibility is even higher.” But the responsibility to rebuild sustainability does not lie with businesses alone. Governments have a role to play here too – something that we’re already seeing in Spain. The country is set to receive around €140 billion from NextGenerationEU, the European Union’s recovery plan, which will go towards Spain’s Recovery, Transformation and Resilience Plan. The plan covers green fiscal reform and includes bringing forward the country’s Integrated National Energy and Climate Plan goals from 2025 to 2023, the introduction of 250,000 electric vehicles, boosting renewables, especially floating offshore wind farms, reinforcing the grid and investing in smart grids. The business fabric of the plan has been framed in a document put together by the Spanish Confederation of Business Organisations. “It involves the entire value chain of companies. Through their awareness, and the implementation of a purchasing policy that incorporates ESG criteria, they must prominently emphasise the protection of human rights,” explains Zabala. THE BIGGER PICTURE It’s easy to see how investing in industries that support existing sustainability momentum creates more jobs, and gives us a ‘greener’ normal after the pandemic. But what about the businesses whose existence was never based around these goals? We’ve already seen that investment banks and wealth managers are creating sustainability-focused portfolios, but what about those that, on paper, have very little need for interaction with sustainability practices? “For several years now, companies have been worried about what new talent wants,” explains Megan Kashner, Clinical Assistant Professor and Director of Social Impact at Kellogg School of Management, Northwestern University. “Prospective employees want the company they work for to be purpose-driven, to be on the right side of sustainability and to feel their values align with the values of the company. As a result,
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  13 ALAMY, ISTOCK IN THE UK,THE WIND FARM INDUSTRY IS EXPECTED TO CREATE 2,000 JOBS The pandemic has caused huge job losses. Latest figures from the UK, from October to December 2020, reveal a 5.1 per cent unemployment rate, which equates to 1.74 million people being unemployed and a 0.2 percentage point rise from the preceding three months. In the US, unemployment reached 6.7 per cent in December 2020, which equates to 10.7 million individuals. For some, however, there is good news to be found. In the worldwide bid to find employment for these individuals, many governments are looking to help industries that support sustainability. “ESG criteria opens up a wide range of economic opportunities for companies that could be the way out of the economic crisis in which we are immersed,” explains Patxi Zabala, Director of Corporate Social Responsibility at Spanish industrial and tech company Velatia. “The loss of jobs could be compensated by employment generated through the implementation of a circular economy model or by investment in the field of renewable energy.” The EU is already paving the way for such changes, for instance in its NextGenerationEU, which is using a budget of €1.8 trillion to rebuild Europe after the pandemic, 30 per cent of which will be allocated towards fighting climate change. Jumping on its success of previous years, which saw the number of green jobs rise from 3.1 million in 2000 to 4.2 million in 2017 – a rise of 35.5 per cent – the EU also announced in 2020 that it will create at least a million jobs, with workers in polluting industries helped into new roles. Now no longer part of the EU, the UK has its own strategy: having wind farms power every UK home by 2030, which in itself will create 2,000 jobs and support an additional 60,000. And in the US, the sustainability plans of President Joe Biden have been hailed as the most ambitious yet, including returning to the Paris climate pact and his goal to make US electricity production carbon-free by 2035. This will generate more jobs, and many green advocates are pinning their hopes on his presence at the 2021 G7 summit, taking place in the UK. SUSTAINABILITY AND SUBSIDIES we’re seeing an increase in jobs that are about sustainable supply chains, that are in clean energy, diversity, equity and inclusion, and that are focused on sustainable finance. We’re seeing some of the biggest financial institutions shift their hiring to put talent behind these necessary initiatives, which it might have seemed they were only giving lip service to previously.” She adds that although previously progress was slow in providing transparency where it wasn’t required by law, “something about the pandemic has accelerated that”, and companies are having to make sure people like what they find. It’s also fair to expect one of the direct outcomes of the pandemic to be that companies proactively change their hiring policies, as Zabala explains. “2020 was a year of changes, and the health crisis highlighted the need for sustainable models, the great relevance companies have in society and their fundamental role in providing rapid responses to the most critical, global and unexpected situations. In fact, in this pandemic many companies have demonstrated exemplary behaviour by making their resources available to the community, responding to productive, health, economic, material and social needs.” So whether it’s an increase in jobs directly in the field of tackling climate change, or in roles in businesses that put sustainability at the forefront of a company’s ethos, the experts believe more jobs are coming. Zabala concludes that intelligent organisations understand this opportunity. “They are reorienting their business models, with investments of millions in some cases, and with a positive impact on their entire value chain with the creation of thousands of jobs.”