ESG: Invest in People and Community
The social component of ESG isn’t a checklist of brownie points; it’s a commitment to investing in people and the communities where your company operates.
It is imperative to move beyond the bottom line and recognize your actions’ far-reaching effects. This involves a shift in mindset from simply extracting value to creating a positive impact.
Invest in Your Workforce
Your workforce is one of your most important investments. Treat employees not just as a cost center but as valuable assets for business sustainability. Business leaders should strive to create a workplace where employees feel respected, valued, and supported. This can include offering competitive wages, comprehensive benefits, and opportunities for professional development. The goal is to foster employee loyalty and longevity, because employees hold organizational knowledge and strategic visions that help companies succeed. If employees are not treated well, it affects the long-term sustainability of the company because people may stop buying their products or services.
Recognize the Talent Pipeline
Beyond employees, recognize your role in the broader community. Your presence in a community comes with accountability and responsibility. Be intentional and contribute positively to the well-being of the community through social engagement. This can involve a wide range of activities, such as investing in workforce development programs in local high schools. Companies benefit by developing a pipeline of talent in the community in which they operate.
Furthermore, investing in education is crucial for long-term social impact. Support programs that teach younger children important concepts such as budgeting and urban planning. Invest in preparing students for careers, rather than simply pushing everyone into college with no career aim. The traditional higher education model is changing, and you’ll need to adapt to these shifts by investing in skills-based education at the middle and high school level.
Business As Global Transformation
Finally, the social component of ESG requires companies to look at the larger world around them. Think about your impact on marginalized communities both domestically and internationally. Actively work to minimize your negative impact and help to build more just and equitable societies. This may involve taking steps that at first seem “socialist” but are vital to long term success because it is not sustainable to continuously marginalize people. Focus on the larger picture to help promote social good because “the people who you eat today could be the people eating you tomorrow”.
Watch the full Fast Forward Podcast episode on the social component of ESG here: https://youtu.be/2v3qS3JKCGo?si=xGrCGiiZ-E4vbp5G.
