Sustainability in HR: Driving Environmental Change

The role of human resource management has evolved over the years. It could be said that early HR focused on administrative tasks such as payroll, record-keeping, and compliance with labor laws.

Today, in addition to overseeing personnel management, employee relations, well-being, hiring, and organizational strategy, HR leaders have assumed the responsibility of championing core company values.

This includes supporting social responsibility and sustainability initiatives within an organization. And HR is likely to continue evolving, with increased emphasis on responding to AI, automation, and things that haven’t even been invented yet.

But what of sustainability? How do HR teams already engage with sustainability strategy, and what good things can happen when they get involved in these eco-friendly practices?

In this blog, we examine corporate responsibility and how organizations and their HR teams are taking practical actions to support sustainability efforts. While the world's response to the environment may vary, HR can still implement initiatives that reduce harmful impacts, engage employees in eco-conscious practices, and ultimately contribute to a more sustainable workplace.

Climate Change, a Growing Worry

According to a recent Ipsos report, climate change has been identified as the seventh worry of the world.

The public opinion and market research experts have revealed that inflation holds the top spot, with 40% of individuals fearing rising prices. Yet, in a noteworthy shift, according to Ipsos’s “What Worries the World” survey, climate change concern has grown globally in the last month.

Singapore leads in climate change concerns, with 30% of its population ranking it as a top issue. In July, Germany held the top spot with 29% of its population expressing concern about climate change. However, this month, it has slipped to second place.

Italy has also witnessed a shift, with 28% of its citizen respondents now ranking climate change as their fourth major worry.

Interestingly, Ipsos found a sharp jump in public concern about climate change in the UK. As news reports highlight severe heatwaves affecting Europe and the globe, the percentage of British individuals worrying about the environment surged by thirteen points in the past month, reaching 25%.

But this increasing concern over climate change is not just a matter of public sentiment. There is also a growing awareness of the urgent need for environmental action from the corporate world, and this is precisely where HR teams and strategies can make their mark.

The Role of HR in Sustainability

Okay, full disclosure. Unfortunately, we’re not about to espouse a master plan on how HR can solve all climate change concerns. We won’t oversell the ability of HR functions to roll back the climate clock and facilitate a harmonious global response.

Nonetheless, HR teams, akin to individual pieces of a jigsaw puzzle, can contribute to the broader sustainability solution.

These days, environmental, social, and governance (ESG) factors hold significant influence within companies. They are no longer viewed as optional add-ons but as integral to successful corporate strategy.

Companies are aware of their environmental impact and want strategies to mitigate certain business practices. Or, to put it like Unilever CEO Alan Jope, who had faced harsh criticism for imbuing Hellman’s Mayonnaise with a purpose beyond a sandwich spread: “We’re a for-profit organization... it contributes to the bottom line.”

Of course, corporate responsibility can be for both altruistic and employer brand or economic reasons.

Therefore human resources, often considered the heart of an organization, can play a crucial role in heralding sustainability efforts. Let's take a closer look at how sustainability in HR is actually making a difference in workplaces, addressing the environment, and potentially easing some of our concerns.

Eco-Friendly Policies and Benefits

Sustainability-aware HR departments can be instrumental in implementing eco-friendly policies and benefits. This can include incentives for carpooling, cycling to work, or using public transportation. Providing potentially green benefits like work-from-home options or incentives for using reusable products can help reduce an organization's carbon footprint and also raise much-needed awareness. Organizations may also invest in green tech development to boost their environmental efforts and encourage sustainability throughout their operations.

In 2017, Nike, through its Reusable Dishware Program, reduced one-time-use lunch containers like bottles and plastic cups by around 16,000 pounds per quarter at its headquarters in Oregon. Overall, the average waste per occupant at five Nike headquarter locations went down 11.9%.

Ethical Supply Chain Management

As outlined by McKinsey research, HR teams are always in the picture when it comes to an organization answering “Who We Are” and “How We Operate.” HR professionals can be involved in ensuring the ethical guidelines of an organization. For example, they can collaborate with employees and strategic procurement teams to establish goals and wishes regarding the supply chain.

An example of a company working to better its carbon footprint is Google. The web giant has reported that it is 90% of the way to achieving UL 2799 Zero Waste to Landfill certification for all its final assembly consumer hardware manufacturing sites.

Google's extensive HR team likely plays a pivotal role in effectively broadcasting the company's sustainability goals and achievements across its vast global workforce and beyond.

Sustainability Metrics and Reporting

Just as HR uses key performance indicators (KPIs) for roles like recruitment and onboarding, sustainable development indicators are becoming integral.

HR teams can track metrics related to employee engagement in sustainability initiatives.

Reporting these metrics transparently can be important for stakeholders and demonstrates the organization's commitment to sustainability.

Salesforce is an example of a company blazing a trail in sustainability metrics. When launching its Sustainability Cloud 2.0, now Net Zero Cloud, Salesforce CEO Marc Benioff said: “Climate change is one of the most pressing crises we face as a planet, and each one of us has a responsibility to help.

“I’m proud that Salesforce is one of the few companies to have achieved net zero and 100% renewable energy for our operations.”

Salesforce’s Net Zero Cloud is now a platform designed to help businesses track, analyze, and report on their environmental impact and sustainability efforts.

It allows organizations to collect and manage data related to their sustainability initiatives, such as carbon emissions, energy consumption, and waste reduction. This data can then be used to set sustainability goals, track progress, and generate reports for stakeholders and regulatory compliance.

Leadership and Culture

HR departments are influential in shaping organizational culture and leading the way in sustainable practices.

By promoting sustainability as a core value, HR can ensure that sustainability efforts are embraced at all levels of the organization. When sustainability becomes embedded in the corporate culture, it is more likely to drive meaningful change.

Interface, a global flooring company, has incorporated sustainability into its company culture and, as a result, has consistently ranked highly in the Sustainability Leaders Survey by Globe Scan.

Such an outward commitment to sustainability and leadership training that aligns with their commitment to reducing their environmental footprint suggests a strong internal commitment to these values within the company.

Companies that communicate their values and goals, especially those related to leadership, commonly have an HR team responsible for effectively conveying these principles to their employees.

The Danger of Greenwashing

Amid the eco-discussion and mountains of sustainability reports, the topic of greenwashing is an inevitability. Greenwashing fundamentally revolves around intention and transparency.

Initiatives that aim to improve environmental sustainability may not be entirely carbon neutral or "environmentally pure". But they can still be considered genuine if they are making meaningful efforts to reduce their environmental impact, are transparent about their progress, and work towards legitimate sustainability goals.

However, there have been examples of companies doing the opposite of this and being called out for greenwashing. Volkswagen’s ‘Clean Diesel’ scandal in 2015 is one such case where the company's eco claims were debunked when it was revealed they had manipulated emissions tests in their diesel vehicles.

The EU Commission has now moved to strengthen laws regarding greenwashing, with a new Green Claims Directive spelling out requirements for voluntary claims and proposing that labels be checked by an independent and accredited verifier. The directive states that companies should have QR codes on labeling linking to the source of green credentials.

While HR teams are unlikely to control all elements of how an organization is run, great HR communication can too play a pivotal role in keeping employees informed and engaged in sustainability efforts and alleviating any greenwashing concerns.

The aim is to be honest and transparent about environmental and social efforts. Clearly communicating company sustainability goals, achievements, and challenges to employees can have a positive impact such as increased recruitment and staff retention.

In fact, according to Fast Company research, most millennials would actually take a pay cut to work for a more responsible company.

The Sustainability Future of HR

We can never be sure of the future. But HR teams are likely to play an even greater role in sustainability and environmental change as the issues become more pressing and corporate responsibility shifts.

The numbers appear to indicate that interest in sustainability and environmental ethics is improving, even if the same cannot be said for pollution levels. Already many business stakeholders, including customers, investors, and governments, purport a keen interest in addressing environmental challenges.

According to PwC, some 86% of employees prefer to support or work for companies that care about the same issues they do. Furthermore, the company’s Consumer Intelligence survey found that 83% of customers should be engaging in ESG best practices.

KPMG reports that 1 in 3 Gen Z individuals would rather reject a job offer from an employer that is not environmentally conscious. In a trend known as “climate quitting”, 18-34-year-olds are displaying a propensity to seek jobs that align with their environmental ideals.

In a recent Forbes report, ESG expert Kenneth P. Pucker unpacked a trend: a rising number of companies are now embracing the most comprehensive GRI (Global Reporting Initiative) standards when filing their corporate social responsibility reports. Although, Pucker reminds us that mere reporting of such intent does not necessarily equate to progress.

Therefore it's important to recognize that shaping a responsible, sustainable, and ethical work environment involves more than just words on paper. And in the ever-changing landscape of the future of work, HR professionals could find themselves becoming more and more involved.

Similar to historical instances where HR responsibilities evolved and expanded, it's conceivable that HR teams may take on an even more significant environmental role as companies acknowledge their obligations to future generations.

While this might not provide a comprehensive solution to environmental fears, it's certainly on the right path to delivering what many employees desire – greater corporate responsibility. Also, as highlighted by the Unilever CEO, there could be some company benefits to spread around too.

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