Work can be a force for good, and the drive towards responsible and sustainable business begins with people. HR leaders can use their influence to build fairer, more human-centric work within their organisations. They can also partner with legal/finance departments to report more fully on the workforce externally.

The situation

Responsible business has been steadily climbing up the agenda, driven by growing investor and regulatory interest in environmental, social and governance (ESG) matters, and an organisational focus on values and purpose. Employers are increasingly recognising that they need to operate ethically and responsibly to meet the expectations of both their workforce and their customers, and to manage reputational risks. To do this, they need to build fair, compassionate and inclusive workplaces, and pay closer attention to their role in communities and society. Leaders and investors are increasingly focused on employee matters as part of a responsible business agenda. Society’s expectations for greater transparency have risen. 

Research has shown that organisations in the UK that had human leadership and trust built into them were those that survived through the COVID-19 crisis the most effectively.

People issues are business issues. Items that might once have been low priority or an afterthought, such as culture, employee wellbeing, diversity and inclusion and engagement, are leadership and board priorities.

People risks are business risks. Health and safety, wellbeing, psychologically unsafe working environments, compliance with employment laws, catastrophic personal events, lack of awareness of the prevalence of modern slavery, lack of upskilling, and failures of succession planning can all impact businesses.

Investors are taking a much stronger interest in the social matters in ESG. With greater transparency around board and workforce diversity, investors are better able to compare the performance of different companies. Research firms collect data on gender equality and health and safety, etc. There are investor coalitions on EDI, health and safety, mental health, modern slavery and many other issues, where investors collect data and table resolutions asking boards to consider improving their performance on these issues.

Pension fund trustees are also being encouraged to consider social issues as part of their fiduciary duties towards the beneficiaries.


CIPD viewpoint

We need a shift in business practices to ensure work is a force for good. The pandemic experience gave us all the opportunity to build a fairer, more human-centric world of work. HR leaders have a vital role to play in leading, building, managing and governing responsible businesses – we must not snap back or maintain outdated working practices but rather develop best practices for the new world of work.

An organisation’s people are a key part of the 'S' in ESG. All the key challenges facing boardrooms and leadership teams today require a deep understanding of the people aspects of business.

The people profession stepped up to the plate during the COVID-19 pandemic. Now we must maintain and cement its well-earned place at the top of the organisation.

Key to achieving this is improving the quality of external reporting on human capital management information. This can ensure there is wider understanding of the value of investing in the workforce to underpin responsible business practice and sustainable performance.


Actions for policy-makers

  • Governments should support the development of international human capital and human rights standards via the International Sustainability Standards Board. 


Recommendations for employers

  • Employers can already refer to work by the World Economic Forum and others on frameworks and human capital metrics for key stakeholders such as investors, customers and workers on how they invest in, manage and develop their workforce for the long term.
  • Metrics may include topics such as: 
    • Organisational culture.
    • Employee engagement and voice.
    • Health and wellbeing.
    • Fairness in reward and recognition.
    • Flexible working.
    • Inclusivity.
  • Make responsible business a formal part of your HR leaders’ role and support them to take the lead in designing a new world of work. HR leaders can lead on building, managing and governing responsible businesses.
  • Develop HR leaders to speak the language of the boardroom and encourage them to take boardroom opportunities.
  • Invest in leadership and people management development programmes that are focused on building cultures of trust, ensuring managers at all levels role-model behaviours that support employee engagement and wellbeing.
  • For better people and workplace decisions, align your approach to the professional values of being principles-led, evidence-based and outcomes driven, a key element of the Profession Map.
  • Prioritise improving the quality of human capital data and analytics. This will not only support the case for enhanced investment in people management and development, but also provide greater transparency for stakeholders, such as investors and customers, on how the organisation treats its workforce.

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