Thursday, January 13, 2011

Project Social: Why Should HR Care About Sustainability?

As an HR professional, you might think sustainability isn’t a high priority for HR.  And, given all that's going on in the HR world right now you may be right… for now.

However, the business climate is changing.  Increasingly, customers and investors want to know what kinds of companies they’re doing business with and they’re starting to ask for evidence of sustainable business practices.

In the not so distant future, being competitive will mean being sustainable.  Even today:

  • In 2010, a record number of investors filed shareholder resolutions related to climate and energy;1
  • According to E&Y recruiting top talent is more difficult for organizations that do not communicate their sustainability agenda.2

Mind you, most people assume that sustainable means ‘green,’ which is not the case.  Sustainability means being a responsible corporate citizen and looking after the best interests of the people and communities that interact with your company.

So how might this impact HR over the next year or so?  Well, for one thing, sustainability is good business and the purpose of strategic HR is to support the business.

But more tangibly, if your company decides to produce a sustainability report - as more and more companies are beginning to do - HR will asked to produce the workforce metrics.  So it can't hurt to start thinking about sustainable workforce practices.

The most common sustainability reporting framework follows the guidelines laid out by the Global Reporting Initiative (GRI).  The complete list of GRI reporting metrics, which includes a variety of economic, environmental, workforce, community and product performance indicators, may be found here.

The ones relevant for HR are these:
  • LA1 - Total workforce by employment type, employment contract, and region.
  • LA2 - Total number and rate of employee turnover by age group, gender, and region.
  • LA3 - Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations.
  • LA4 - Percentage of employees covered by collective bargaining agreements.
  • LA5 - Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements.
  • LA6 - Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs.
  • LA7 - Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities by region.
  • LA8 - Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.
  • LA9 - Health and safety topics covered in formal agreements with trade unions. Health and safety topics covered in formal agreements with trade unions.
  • LA10 - Average hours of training per year per employee by employee category.
  • LA11 - Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.
  • LA12 - Percentage of employees receiving regular performance and career development reviews.
  • LA13 - Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity.
  • LA14 - Ratio of basic salary of men to women by employee category.

Pretty basic stuff, really, but it’s best to be prepared.  Are you?

Also be sure to check out my Project Social partner Dave Ryan’s upcoming post at HR Official on health and safety initiatives at his company, which will stand him in good stead for reporting on sustainability indicators LA6-LA9.

1 Ceres, “Investors Achieve Record Results On Climate Change”, July 7, 2010 - available here
  2Ernst & Young, “Ready Or Not, Here Comes Sustainability” (2009).

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