The connection between HR and sustainability might appear intangible. Does ‘employer of choice’ equal sustainable HR? The Chartered Institute of Personnel and Development stresses that embedding sustainability requires us to link vision and values to the environmental contribution required from every employee. Yes, HR’s critical contribution is embedding transformational change. However, some environmental constraints are now affecting reward directly, especially pensions. So we now need to factor these impacts into our programmes and take long-term accountability.
HR’s sustainability role is intricate. Firstly, sustainability begins at home, so organisations must ensure they manage employees sustainably. Employee wellbeing, health and safety, work-life balance, inclusion, talent management, fair total reward, employee development, positive and open dialogue, and employee involvement in-house and out, are all vital. We all know they interlink to deliver a high-performing, engaged, healthy and wealthy workforce. Job done?
Secondly, look at cost-effectiveness and governance. Leading green organisations recognise that sustainable business is good business. It’s all about efficiency and cost-effectiveness, not PR. Are employers sure their total rewards optimise cost-effectiveness and return on investment, with key components supplied by reputable partners? The trend is to look at the true cost (environmental and reputational), as well as the social contribution of individual business activities. We should adopt this approach, too. What does it say about our reward components and their relative cost or contribution?
Recently, we highlighted the impact of reduced investment returns and robust inflation on pensions. Secure, affordable pensions depend on a clear investment return gap. The challenges here arise from the long timeframes and strong correlations in carbon, climate, resource and investment management and pensions. This calls for a radical rethink of saving-at-work incentivisation with far more lenient taxation, not penalisation.
Thirdly, integrated programmes will lead to an improved understanding of global climate and resource scarcity challenges. Simple workplace actions often achieve the greatest change, such as Center Parcs rewarding employees’ home energy savings to reinforce how vital energy efficiency is corporately. Sustainable HR and rewards add up for the individual. Helping employees reduce their commuting, business travel, home energy and water costs today will add up tomorrow at individual and corporate level.
It is impossible to address all the crossovers between HR, reward and wider sustainability here. The issues are complex and we all live in a highly interconnected world with a weakened economic system but, as US president Barack Obama has said, we can no longer ignore them, not even in HR and reward.
Tim Roberts is managing director at Good Measures