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S U STAI N A B L E H U M A N R E S O U RC E M A N A G E M E N T
Sustainable HRM creates the skills, motivation,
ESG evaluation & Sustainable HRM values and trust to achieve a triple bottom
line and at the same time ensures the long-term
health and sustainability of both the
organization's internal and external stakeholders,
with policies that reflect equity, development and
well-being and help support .
Sustainable Human Resource Management S U STAI N A B L E H U M A N R E S O U RC E M A N A G E M E N T
Sustainable Human Resource Management
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E S G Conclusion: ESG for long term
Environmental criteria Shareholders and stakeholders do Businesses need to play the
•Social criteria •Governance not compete in a zero-sum game long game
● Includes the energy your ● Addresses the
01 Compromising your connections
with stakeholders simply to make
03 Need to satisfy the needs of their
customers, employees, and
company takes in and the relationships your communities—these days, often a
waste it discharges, the company has and the ● Internal system of practices, earnings targets, on the other hand,
reputation it fosters controls, and procedures global community—in order to
resources it needs, and the destroys value.
consequences for living with people and your company adopts in maximize value creation.
beings as a result. institutions in the order to govern itself, make
Not least, E encompasses communities where you effective decisions, comply
●
carbon emissions and do business. with the law, and meet the Shareholders’ and stakeholders’ “Enlightened value
climate change. Every ● S includes labor needs of external interests cannot conflict maximization”
stakeholders.
02 04
company uses energy and relations and diversity
resources; every company and inclusion. ● Every company, which is Should companies pay employees more
affects, and is affected by, ● Every company operates itself a legal creation, than is necessary to keep them engaged Framework that enforces a cost-
the environment. within a broader, requires governance
diverse society.
and productive, putting employee benefit analysis for ESG
interests first over shareholders in investments
particular?
5 6
Esg Profile: factors Esg evaluation
ESG Evaluation by S&P Global
A Profile score (100%)
1 Environmental Profile (30%)
2 Social Profile (30%)
3 Governance Profile (40%)
B Preparedness Opinion (score)
C Climate-related financial disclosure (subjective)
D ESG Evaluation= A+B
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Case study- nextera energy inc nextera energy inc: preparedness opinion
About NextEra Energy Inc: The Preparedness opinion is a qualitative view of a company’s capacity to anticipate and adapt to a variety of long-term disruptions.
• Headquar tere d in J uno
A1 A2 A3 Beach, Florida
• G e n e ra te s , t r a n s m i t s ,
distri bute s, and sells
power to retail and
wholesale customers in
B.
North America
* Entity-specific scores assessed
on a relative basis, against
sector peers
* * *
A.
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nextera energy inc: Climate-Related Financial Disclosure
5 LINKS TO VALUE CREATION
E S G
Environmental criteria A strong ESG proposition helps companies tap new markets and
•Social criteria •Governance expand into existing ones.
Addresses the
Attract B2B and B2C customers with more sustainable products.
● Includes the energy your ●
company takes in and the relationships your
Internal system of practices,
TOP
waste it discharges, the company has and the ●
Achieve better access to resources through stronger community
resources it needs, and the reputation it fosters controls, and procedures
consequences for living with people and your company adopts in and government relations.
1.
LINE
beings as a result. institutions in the order to govern itself, make
Not least, E encompasses communities where you effective decisions, comply
●
For example, when Unilever developed Sunlight, a brand of
GROWTH
carbon emissions and do business. with the law, and meet the
climate change. Every ● S includes labor needs of external dishwashing liquid that used much less water than its other
company uses energy and relations and diversity stakeholders.
Every company, which is
brands, sales of Sunlight proceeded to outpace category growth
resources; every company and inclusion. ●
affects, and is affected by, ● Every company operates itself a legal creation, by more than 20% in many water-scarce markets.
the environment. within a broader, requires governance
diverse society.
15 Reading-5 ways that ESG creates 16
value
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5 LINKS TO VALUE CREATION 5 LINKS TO VALUE CREATION
Executing ESG effectively can help combat rising Strong external-value proposition enable companies to achieve
operating expenses such as raw-material costs greater strategic freedom, easing
and the true cost of water or carbon. regulatory pressure
That strength in ESG helps reduce companies’ risk of adverse
A number of companies across sectors have done government action. It can also bring about
particularly well—precisely the companies that government support
had taken their sustainability strategies the
furthest. Analysis shows- Typically 1/3rd of corporate profits are at risk from
2. COST 3. State intervention.
REDUCTIONS For example, FedEx aims to convert its entire REGULATORY AND In many industries, a large share of corporate profits are at stake from
35,000-vehicle fleet to electric or hybrid engines; LEGAL external engagement.
to date, 20 % have been converted, which has
already reduced fuel consumption by more than INTERVENTIONS For eg., for pharmaceuticals and healthcare, the profits at stake are
50 million gallons. about 25 to 30 %.
17 18
5 LINKS TO VALUE CREATION 5 LINKS TO VALUE CREATION
A strong ESG proposition can help companies attract and retain quality A strong ESG proposition can enhance investment returns by allocating capital to more
employees, enhance employee motivation by instilling a sense of purpose promising and more sustainable opportunities.
& increase overall productivity.
While the investments required to update operations may be substantial, choosing to
Employee satisfaction is positively correlated with shareholder returns.
wait it out can be the most expensive option of all.
Also, employees with a sense of satisfaction & connection have been seen
to perform better. Regulatory responses to emissions will likely affect energy costs and could especially
affect balance sheets in carbon-intensive industries.
The flipside-
A weak ESG proposition can drag productivity down. Bans or limitations on such things as single-use plastics or diesel-fueled cars in city
[Link]
The most glaring examples are: strikes, worker slowdowns, and other
labor actions within the organization.
5. INVESTMENT centers will introduce new constraints on multiple businesses, many of which could
find themselves having to catch up.
PRODUCTIVITY AND ASSET Capitalising on sustainability offers fresh chances to boost investment returns. For
OPTIMIZATION
Farsightedness of companies go a long way. For Eg, Mars seeks
UPLIFT
instance, it is anticipated that China's need to address air pollution will generate more
opportunities where it can deliver what it calls “wins-wins-wins” for the than $3 trillion in investment opportunities across a variety of sectors, including
company, its suppliers, and the environment. cement mixing, indoor air purification, and air quality monitoring.
19 20
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The Personal Dynamic Conclusion: ESG for long term
S RP Shareholders and stakeholders do Businesses need to play the
not compete in a zero-sum game long game
Get Specific •Get Practical
•Get Real 01 Compromising your connections
with stakeholders simply to make
03 Need to satisfy the needs of their
customers, employees, and
communities—these days, often a
earnings targets, on the other hand,
global community—in order to
An honest appraisal
especiallyofmore
ESG destroys value.
● Managers, maximize value creation.
● Large companies can have includes acknowledging
senior ones, are usually that
dozens of social, community, getting
assessed it based
wrongon can result in
or environmental projects in massive
performancevaluetargets.
destruction. Shareholders’ and stakeholders’ “Enlightened value
motion at any time. ● Companies
Under thosethat performtop-
conditions, interests cannot conflict maximization”
● Too many at once can be a poorly
down ESGin ESG criteria are
pronouncements
●
muddle; some may even
work at cross-purposes.
Priority initiatives should be ●
likely
events.
to endure
can seem adverse
distracting
vague to be of much use.
Leaders
or too
should vigilantly
To get everyone on board,
02 Should companies pay employees more
than is necessary to keep them engaged
04 Framework that enforces a cost-
clearly articulated, and the assess
make thethecase
valuethat
at stake
your and and productive, putting employee benefit analysis for ESG
number should be no more plan scenarios
company’s ESGfor potential
priorities do interests first over shareholders in
than five. hits operating
investments
link to value, andprofits.
show particular?
leaders how, ideally with
hard metrics 21 22
Any questions?
