Nigel Cassidy: There really is no time to lose in making our businesses environmentally sustainable. But should people professionals get involved? And if so, how? I'm Nigel Cassidy and this is the CIPD Podcast.
Now, are you really doing all you can to decarbonize your organisation? Six out of ten of today's biggest business risks relate to sustainability, according to the World Economic Forum. Yet only around half of organisations have made meaningful reductions in their carbon footprints. That's doing things like adopting energy-saving technology, new working practices and switching to sustainable materials. I mean, it is a puzzle because, of course, customers want to deal with greener organisations, your staff care about this. So, if company leaders are faltering on sustainability, is it time HR stepped in to identify poor practice and become change agents?
Well, let's find out. With us, a senior banker turned board sustainability advisor. Her mission to turn corporate ESG activity from what's too often seen as a marketing exercise into a powerful tool. She's Gilda Nieman, board director at Chapter Zero in Brussels, a forum that helps executives embed climate into business strategy. Hello, Gilda.
Gilda Nieman: Hello.
NC: From the home team, we welcome CIPD's senior corporate governance advisor, Susannah Haan. She says leaders need to be given the confidence to initiate change. Hi, Susannah.
Susannah Haan: Hello.
NC: And a return visit to the podcast for an occupational psychologist with a focus, among other things, on behaviour change in business. She's currently updating the CIPD's sustainability guide, which she authored. It's Dr. Jan Maskell. Welcome back, Jan.
Jan Maskell: Hello, everyone.
NC: So, Jan, I'll start with you. As I say, you were here when our podcast 174 probed the business case for sustainability. It's still there, still a useful listen. We had a real-life case study. We looked at setting goals and measuring effectiveness. We considered supply and value chains. But, Jan, I think it's fair to say that sustainability actions within a business were really seen as strategic matters for leaders rather than HR. I mean, is that still the case? Has much changed in the last three years?
JM: I think that's a really interesting question, Nigel. I think it's not only a strategic issue, but it's an operational issue. And this is where HR will come in because HR professionals, people professionals, engage with everyone in the organisation at some point so that they have the opportunity to have that leverage. So, it's often about translating that strategy, and that could be the overall business strategy or the people plan, into what does that mean for individual employees. That's where HR will come in because they engage with people at all levels and throughout their employee lifecycle.
NC: Okay. Well, that makes sense. Gilda, I mean, let's be clear, sustainability here, we're referring to an organisation reducing the environmental impact of its own operations and, of course, beyond through its supply chain and so on. I mean, most organisations, they've got their ESG metrics, they've got their ambitions. I mean, leaders must know by now that they've got to keep acting on this. And I know your own surveys have shown that. So, in your experience, what's getting in the way of businesses sort of revisiting this and doing better?
GN: Indeed, we held a survey recently at Chapter Zero Brussels in the director community. And the most important barriers that came out of that survey were, first of all, lack of time and resources, competing priorities on the business, but really, simply, the climate is not being prioritised. A second barrier was the lack of understanding and expertise on the topic within their boards. And, you know, climate, sustainability, these are very, very complex issues that are transdisciplinary and probably require a transformation from many companies in order to survive in the future. You know, you wouldn't have on your board, no one who understands finance, you always have finance expert. So, why don't you have experts in climate change and sustainability's impact on companies? So, that is the second barrier.
A third barrier is focus on short-term profitability and just not looking out far enough. Let's say that the typical perspective of a company doesn't fit many of the impacts of climate on the companies. And so, they have to begin to look out further than the normal business cycle. And finally, a perceived lack of pressure from stakeholders. And I say perceived because I think there are many board members who still have just not become aware of how rapidly expectations are changing from all of their stakeholders, their investors, their customers, regulators, their own employees. And that has to change. They have to become more aware and supportive.
NC: Well, Gilda, that's great. That's a really clear explanation there of why organisations are falling short. But Susannah, these are pretty strategic things, aren't they? I mean, if you're talking about, you know, failure to invest in energy saving, changing logistics, all these things. Why then, in spite of what you say about people professionals having these touch points with individuals across organisations, is this really a role for human resources people to get involved? I mean, how do you get involved, particularly at a high level in saying, look, we need to look again at this?
SH: I think particularly if you're talking about the higher level, as Gilda mentioned, with boards not having the right skills. Actually, this is an area where HR has the expertise in understanding skills, assessing the skills of a team, and the board is just a team. So, I do think there is a possibility for HR to engage with the board and to help discuss, does the board have the skills that it needs, as well as do frontline employees as the workforce, have the relevant skills to deal with climate change and the changes that will happen to the businesses over the next 10 years that they need to be on top of.
NC: Gilda, I mean, just let's go back to you on that. I mean, in your time sort of looking at this issue in particular, do you find there's a lot of interplay with human resources where there are these deficiencies?
GN: Absolutely. I think they come in at almost every stage. Because this requires a lot of change in organizations, HR has to be involved, first of all, at the level of educating probably every single person in the company and how can that be done from all of the workers through the board level. It requires changes in the organization, how will that be orchestrated, engineered, how to find the right kinds of people, working maybe with recruiters to find them, how will employees be assessed in the future to work towards this new goal, do they have the right objectives and the right behaviours? There's just so many things that the HR professional needs to be involved in, in addition to supporting their leaders in what kind of culture they want to develop in their companies in the future around these new topics.
JM: Yes, exactly. I think a lot of the things that Gilda was talking about there are things which HR professionals are already doing. So, I think what's important to think about is this is not about necessarily doing something new, something different, something to layer on what you're already doing, but it's about thinking about, as an HR professional, as a people professional, what do you currently do? Are you involved in recruitment selection? In which case, can you integrate some of those environmental sustainability issues into your processes? So, I think people professionals can look at what is the organization already doing in terms of environmental sustainability and then how, as an HR professional, can I ensure that that's integrated within what I'm already doing? I'm hearing from Gilda a few key words there about change.
Now, HR professionals should be experts in implementing change, whether that's around organisational design and development or whether it's about implementing change within organisation. I think HR's role is in implementing those things within what's already done. So, you talked about educating people in issues. So, environmental sustainability, climate change. So, that's an L&D role. So, that's partly how do you integrate all of that within what L&D is already doing? So, that could be onboarding, induction, professional development, leadership development. So, it's not doing something new, something different. It's about putting climate change within what you're already doing. Employees are already trained in lots of things. Can we integrate climate change and environmental sustainability knowledge within that? And similarly, I'm thinking about competencies. So, competencies run throughout the employee life cycle from recruitment, job descriptions, person specifications, through performance management and appraisal. So, competencies are a key area. So, if you've already got a competency framework, can you put your sustainability competencies within that framework?
NC: Jan, while we're with you, just as you're the psychologist, I just got something else I wanted to ask you before we get a bit more into the detail of how HR can get involved. I just want to ask you this. I mean, when Covid hit, I mean, in order to survive the threat of a global pandemic, I mean, the business world, we changed everything we did, didn't we? Where and how people were deployed. The climate threat surely is a lot greater, yet we can hardly say that the response has been so energetic. Are there any kind of reasons for that?
JM: Yes, yeah. It's really interesting when you look at how people respond to crises. I think the global pandemic was something that we could relate to personally. So, we could see how it could impact us as individuals, our loved ones. We could see the damage that it was causing. It was also a very abrupt crisis, whereas climate change is happening over a longer period of time, and it's hard to see because of temporal and spatial discounting. So, I think the fact that Covid was something we could see impacting on individuals, it was happening quickly. It was also something that we felt was immoral, whereas climate change, unless we reframe it as a health crisis, rather than a climate crisis, people will respond to a health crisis, possibly more than they would respond to a climate crisis.
NC: That's very interesting. So, I wonder whether that might affect how people sort of get this issue across within organisations. Susannah Haan, you've talked in Outline about how HR people can get involved in this. What is the forum or the process for both getting senior managers to begin initiatives and then galvanise people right down through an organisation?
SH: Well, I think with senior people, it always, well, all people really, it always makes sense to start the discussion around what are they interested in, what are their drivers? So, part of it is, as Gilda was saying earlier, lack of time resources. What are they concerned about from a business perspective? And then to link your concerns, your engagement around their drivers. So, it may be recruiting enough good people in order to achieve the business goals to expand, to move into new markets. So, then, how can you attract more people? By showing that you are a good employer, that people want to come and work for, etc. So, one of the ways in which people may be attracted to your company is to show that you are a green company, that you are environmentally sustainable. So, that could be one way of engaging with senior management is very much linking back to the business goals.
NC: And Gilda, how do you get more engagement when you work with companies?
GN: Maybe I can talk about the actions that can be taken. First and foremost, it's the leadership. And I think that that has to come first and foremost from the CEO and the chair of the board. Because if your leaders take it seriously and say that the company has to change, that's the best way for people to follow. Just assuming you hire a sustainability lead, sustainability officer, and they're going to go and do everything without the senior leadership paying any more attention, it won't happen. So, I think that's a first driver. I talked about education. I think it's only through that, that you start to understand the different consequences of different aspects. And we can't assume that anybody already knows those, even I. I, other experts, constantly learn new things through this because it's so complex. And you want everyone in the company to start understanding that as much as possible.
I heard Jan use the word integration, and that is really key. And what I wanted to say earlier is this is the area where everybody has to work together. So, you have to integrate it in all of your strategy, all of your processes, all of your businesses, and everybody has to be included. So, HR is a key partner in working together with everyone in the organization through their usual processes. That's absolutely the case. And how do we use those, leverage them for the entire organization together? So, you can integrate it in the company and in your company strategy.
NC: Susannah Haan, does that strike a chord with you? I know you're sort of working on how the CIPD can sort of continue sort of updating its advice to organisations. I mean, there's an awful lot to do on an awful lot of fronts here.
SH: There certainly is. A few thoughts, I guess. So, one coming back to the CEO and the chair, so leadership from the top, as Gilda says, you have to have that clarity that this is a priority. Where you have very mixed priorities, it's difficult to get things done. And I think that is another factor when we look at the pandemic is it was a priority for everyone because everyone was affected. The education and leadership development coming down from that, if you want to be a leader in this company, if you want to progress, then climate change is one of the things that needs to be integrated into the leadership development training. Already, it is mentioned as one of the factors in the CIPD's profession map, part of the business acumen standard. So, HR does need to understand the impact of climate change to engage with the business. And then I think really thinking about employee engagement and how you can use existing processes to talk to employees, to engage with employees, to empower employees so that they are engaged and less anxious.
NC: Well, of course, you can also use a carrot or a stick, Jan Maskell. I was thinking with some of the areas of the business where people managers might be able to sort of up their focus on environmental sustainability. There's the question of the performance reviews, isn't there, a compensation and that is or ought to be based on some kind of sustainability factors.
JM: Yeah, if you're talking about the relationship between performance and reward and environmental sustainability, absolutely. Organisations need to ensure that their targets for the organisation and down to individuals, the objectives are consistent, so they're all aligned. But also, if you think about environmentally sustainable rewards, you've got to think about, are we rewarding the right things in the right way? One of the key things organisations can look at is their pensions. So, that's often an important reward for people. So, where is the organisation investing its funds? So, is it looking at sustainable investment, which is a really, really important area for organisations and that's, pensions is the one area where HR can have a key role. I also wanted to pick up on something that Gilda said about leadership and Susannah was talking about engagement. I think leadership is an interesting concept in that often we think about leadership as just being what people in senior positions do. But leadership can operate at every level in the organisation if we think about role modelling and ethical decision-making.
So, role modelling, if you've got people throughout the organisation who are demonstrating ethical and environmentally sustainable behaviours, they can act as an inspiration for other people. And this is where HR can come in, in terms of the engagement and collaboration and giving employees a voice. I think there are a lot of employees who feel, well, what's the organisation doing about environmental sustainability, because I want to do something, but aren't necessarily being given the voice to do that. And I think that's where leadership can occur throughout the organisation. The whole issue of collaboration, which you talked about, obviously at strategic level, that should happen. So, the whole of the board should be thinking about this and this is where HR can come in and enable that. But also operational level, do we need collaboration across different departments within the organisation, say between facilities management and finance or R&D and HR? So, are we bringing those parts of the organisation together and giving the employees within those parts of the organisation the voice for what they would like to see happen in relation to environmental sustainability and behaviour change?
NC: Okay. And Gilda, does that chime with your experience? Do you find that people need to be brought together over this?
GN: Oh, absolutely. I mean, this is completely spot on what Jan has said. And indeed, our young people, if we want to attract them to our companies, they want to be convinced, but they also want to have a say. And I think you have to be open to hearing different suggestions, finding ways to get their voice heard, integrating them into forums that are discussing the different options of the company and bringing those ideas up so that the decisions that are made are taking into account the good ideas of their employees and making them feel they're part of it. These are the things that are going to, you know, you talked about engagement and inspiration in the future and that will make companies more innovative.
NC: I'm glad you brought up this question of younger people. Susannah, there is this, I think we call it eco-anxiety that a lot of people feel now at an extreme level if they think their company is not being responsible. Of course, they might leave. That'll be a loss to the company. But I wonder whether on a more positive level, that's something that people managers can use to bring people together in some way?
SH: Absolutely. So, a recent study by the conference board showed that 60% of the respondents want their employers to do more. So, there is the possibility for engagement with employees on these issues. And we have a couple of case studies on our website. I think Deloitte did some engagement with its employees to make sustainability part of everyone's job and to embed sustainability initiatives into the organisation. So, there are good examples out there that people can look at and copy.
NC: And Jan Maskell, we were hearing there from Susannah about eco-anxiety. Is that something that you think about too?
JM: Yeah, I think as a psychologist, I'm obviously interested in this issue. I think organisations have a role in terms of looking after the health and wellbeing of their employees, but also in terms of carrying out risk assessments. So, are there any roles that might particularly be susceptible to the impacts from climate change? And to consider those health issues, not only for employees, but through the supply chain as well. And it's interesting that HR in their CIPD professions map has some of these issues already covered in terms of cultural behaviour, talk about enabling resilience. So, I think that's something that's really important for HR professionals to think about is the health and wellbeing of their employees.
NC: I suppose, Jan, the danger is that sometimes it's easier to do the small things, isn't it? It's to get rid of disposable cups. It's a lot harder to do things which are not seen and are difficult.
JM: I think you're absolutely right. And a lot of organisations might focus on, you know, switching from plastic straws to paper straws, whereas they're not looking at their whole supply chain and the scope one, two and three emissions and how they could reduce all of those. But there's also a place for doing those small things. And this is where sometimes within HR, you might look at this and go, this is all too big for me to deal with. Well start with something small and then something visible. And those who are interested and engaged in managing change will know that some of those quick wins can have a big impact, but they need to be seen within a bigger picture of are we dealing with this strategically and right throughout the organisation down to operational level. So, yes, I think you're absolutely right. Don't ignore doing the small things, but make sure they're all part of a bigger picture as well.
NC: Now, I noticed there you threw in some of the sort of basic terminology of the sustainability drive with scopes one, two and three, which we won't go into. People can look them up, but essentially describing levels of work that you can do. And of course, there is the basic concept of net zero. Gilda, do you think everybody in an organisation needs to understand all this? Because it can get quite technical. Not everybody reads the kind of documents you would when working with boards. How much understanding would you say you need about the sort of processes of reducing environmental impact, decarbonising in order to do it effectively?
GN: I think so much of what people need to learn is pretty basic. It's about basic science and nature and being aware of what's happening in our environment. And I honestly recommend for everyone in the organisation, starting at the board, but every employee in the organisation should have that possibility to learn about the science, which is, again, very basic, and yet so many people don't know. So, I do think that those are the foundations of what everyone needs to understand. It's very different from what has been done in business until now, but it will become so important to the future of their companies and the environment that they will have to navigate in the future. And so, I do think we need to start with the basics. So, every area, little by little, needs to also receive the more complex training that fits their role and the challenges that they need to meet. But at a basic level, I indeed feel that everyone in the organisation needs some sort of supportive training.
NC: And there was a good statistic, I think, Susannah, you picked this out, I found it online, to really demonstrate what it takes to make a difference. I think you quoted from one survey, this is organisations that have been successful in taking climate actions. 70% have upskilled their existing board members and 60% have actually changed the composition of their board. Now, that's quite a big thing, isn't it?
SH: That's a very big thing, actually, which comes back to the earlier discussion we were having on skills and particularly of senior managers and board members. And I think there is a challenge here about whether the boards that we have now are set up in order to meet the challenges externally that they face. And there are quite a few surveys coming along saying that CEOs and so on are questioning whether their company will still be around in 10 years, whether they have the right people in their teams, whether they are set up for success.
NC: Gosh, well, that's pretty far reaching. And I just wonder why there is inaction, you know, in the light of that. I mean, Jan, is this down to motivation, managing mindsets, just feeling overwhelmed because of that possibility of the company, you might feel the company is not going to be there anymore. I just wonder whether incentives would help. I mean, can HR devise anything clever here?
JM: I think you've touched on a number of reasons. There are any number of reasons why organisations might resist taking action. I think it's back to something that we were talking about earlier, about aligning these decisions to what's important for individuals. And incentives are a really tricky area to go into. How would you incentivise someone to take environmental action? And I think it's appealing to the things that are important to them. So, if you can point out that this climate change is having a real impact on our supply chain, so what are the impacts of that? Personally, I would resist incentives and just talk about how can we enable and encourage people to take action through the sort of education that Gilda was talking about. It's interesting, once people understand some of that basic science and then look at what's the potential impact of climate change on my organisation, but also what impact is my organisation having on climate change?
So it's that two-way process. They can start to think about, yes, it was interesting, my organisation might not exist in 10 years' time. Do I care? Well, yes, I might do. Am I going to do something about it? What do I need to do to enable it to survive? So you're thinking about organisational sustainability. So, is it going to survive the issues? So, about mitigation and adaptation, what actions can we take now to address the issues of the climate crisis? But then also thinking, well, a lot of these things are going to happen because we get into those tipping points. What can we do to adapt to them? So, I think sometimes just the education piece is sufficient to incentivise people to take action. Yeah, very often what I hear in organisations is, oh, we can't afford to do that, to which I would say, well, what's going to be the impact if you don't do that? What's going to be the financial impact now and in the future if you don't do that?
NC: Absolutely. And to try and avoid at all costs, Gilda, just this kind of greenwashing everybody's familiar with where some rather small win is exaggerated, made a big fuss of and we were just chatting beforehand and you came up with, I thought, a rather interesting explanation of why it is that organisations sometimes overplay really something which is not a big deal.
GN: Well, you know, the question of greenwashing, I mean, clearly it's to enhance their image, knowing that everyone's looking at this and maybe trying to find a quick way through a couple of small initiatives, as we were talking about earlier, you know, the conversion of plastic straws to paper straws. In Belgium, you know, there's still company cars. OK, we're going to switch them all to electric and then we're done with it. And that's not a real effort. What I found interesting in the survey that we did, is that when you haven't explored and you don't know, you have no ideas. And if you're not taking a holistic approach to it, you might not see what it really means for your organisation. What we found through the Chapter Zero survey was that companies that began to work together to explore what are their most important impacts and areas of their company that are being impacted or might be impacted by climate change and started actually working through. So, what does that mean? What do we do? The higher the percentage of companies said that they actually believed that taking actions would save their company money rather than it being too much of a cost now. So, in other words, the more aware you become, the less you're greenwashing and you're actually finding ways that this makes your company more efficient.
NC: As we sort of try and draw this together then, I just wonder if I can come around to each of you and ask you to just sort of boil down some of the many things we've talked about to things that organisations can and should be doing immediately. Susannah?
SH: I do think that having a look at whether you have the skills at the top is very important, as well as skills throughout the workforce.
NC: Short and sweet and right to the point. Jan?
JM: I think a thing you can do immediately is look at what you're already doing. So, what's already happening in the organisation, that could be in terms of policies, procedures, accreditation. So, what's your current practice and how can you integrate sustainability practices into what you're already doing?
NC: Right. So get more bang for your buck. And Gilda?
GN: Mine would be to immediately set up some sort of first education session for your board to get things started.
NC: Okay. Well, lots of good advice there. A lot more resources on this from Jan and others on the CIPD website. I think we certainly concluded environmental sustainability is an issue for people, professionals. But I think, as we've heard, it's all about re-examining every responsibility for its climate implications, giving people the confidence, the skills and permission to make changes that bring those measurable results. Let me thank our excellent line-up of Gilda Niemann from Chapter Zero, Jan Maskell and CIPD's Susannah Haan. As always, let me remind you, if you've enjoyed this discussion, please subscribe so you don't miss an edition of the podcast. But until next time, from me, Nigel Cassidy and all of us at CIPD, it's goodbye.
