ESG storm is coming| Strategic Actions for Corporate Sustainability | Have you kept up with the pace of talent development?

Written by Luo Yujuan, Kang Shiteng Management Consultants

What is ESG?What is the relationship with SDGs and CSR?

In addition to environmental protection, what are the ESG aspects that companies can also focus on? Through this article, I would like to talk to you about the core link that is easily overlooked in the process of pursuing ESG – talent development strategy . After all, the operation and governance of a business is closely related to people. First of all, let’s start with ESG, but when we want to introduce ESG, we can’t fail to mention two other related terms, SDG and CSR.

• What are the SDGs?

SDGs (Sustainable Development Goals, SDGs) are translated as the United Nations Sustainable Development Goals。 In 2015, all UN member states adopted 17 Sustainable Development Goals (SDGs) and 169 targets, covering three major aspects: environmental protection, economic growth and social progress, hoping to build the world we live in into a sustainable society in the next 15 years. These 17 goals have named the goals of three major organizations: national governments, businesses and non-profit organizations, and look forward to achieving a more peaceful, sustainable and prosperous world by 2030.

• What is CSR?

Corporate Social Responsibility (CSR) means that enterprises should have a business mindset of “taking from the society and using it for the society”, not only to obtain and use a large number of resources (whether environmental resources or social resources) to make money for shareholders, but also to contribute to social participation and environmental sustainability, so as to create a win-win situation for corporate investors, society (community) and consumers. However, because of the broad definition of CSR, it often becomes a moral chapter of a company, and it is difficult to clearly implement it. Therefore, it is often used to donate money to help the weak, plant trees, clean beaches, do good deeds… It is interpreted as the only effective indicator for enterprises to implement CSR.

• What is ESG?

ESG can be regarded as the principle of CSR implementation by enterprises, which is the action code for the specific practice of CSR, and enterprises can use ESG principles to further deepen their sustainability strategies in corporate operations and risk management. ESG represents three aspects of CSR in the company:

1. E stands for Environment.
2. S stands for Social Responsibility
3. G is for Governance

ESG is an important indicator to measure whether a company can operate sustainably. Therefore, the key questions to be faced by enterprises in their operations, in addition to profits, should also be answered: whether the production process of the enterprise is environmentally friendly, whether the existence of the enterprise is beneficial to the society, whether the enterprise acts in accordance with the principles of proper ethics in the business process?

The impact of sustainable development on business operations

The importance and influence of enterprises to society is becoming more and more obvious, and the responsibility for the sustainable development of the world is becoming more and more important. Therefore, in recent years, listed companies are required to regularly disclose corporate sustainability responsibility reports, which explain the aspects of corporate governance, corporate social responsibility and environmental friendliness, so that investors and the public can understand the efforts made by enterprises in various aspects of ESG. This ESG CSR report will also influence the procurement and investment ratings of upstream and downstream manufacturers, making ESG sustainability benefits a quantitative indicator of corporate sustainability ratings.

The underestimated core driving force of ESG sustainability development plan is talent

When ESG is mentioned, most of the articles will talk about environmental protection, rationality of production processes, social impact assessment, and open and transparent governance, but behind these issues there is actually another important impact on the core of business operations – the sustainable development of talents. For example, the succession crisis, talent fault, talent shortage caused by the declining birthrate and other human instability factors have increased the risk of enterprise operation and affected the sustainable development of enterprises. In recent years, in response to the changes in working styles caused by the pandemic, the issue of talent development has become more important. Therefore, it is obvious that if the sustainable operation of the enterprise lacks the strategic planning of talent development, it is easy to hinder the long-term development of the enterprise, and even cause operational risks and crises. Talent development is not just – finding people, putting them on the production line, climbing the grid, and taking the position will naturally manage and lead everyone, so simple. Without the strategic level of talent development planning, the sustainable growth of enterprises will be just empty talk.

What is ESG sustainability at the level of strategic thinking?

Strategic thinking level of talent sustainability planning refers to the fact that when an enterprise focuses on its development strategy, in addition to building an organizational and governance structure, it also incorporates talent function planning and employee development path into its strategic planning. For example, the construction of talent echelon, the dissemination of corporate culture, the cultivation of leadership, management functions, communication skills, stress adjustment, conflict dialogue, performance interviews, high-performance team construction and leadership, subordinate management, cross-generational or cross-cultural management communication, and even how to select, cultivate, employ and retain. Take stock and plan human resources strategies from the height of strategic thinking, so that talents can continue to develop sustainably, so as to facilitate the sustainable operation of enterprises.

The New Generation Joins the Job Market – A Cross-Generation Management Issue

“Lying flat generation” and “quiet resignation”, these puzzling terms have appeared one after another, in fact, they reflect the value thinking of the new generation that is different from the previous generation. While Baby Boomer executives are a sign of hope and a bright future, the new generation expects work to be more than just earning, but meaningful and contributing to the world. Therefore, to manage the new generation of employees, you can’t use the phrase “because you get paid to do a good job.” Instead, it is necessary to give a sense of meaning to work and attract them to pursue self-fulfillment. Building a platform for communication and coordination between the old and new generations encourages understanding, respect and dialogue between generations and cultures, and is also a way to increase the social impact of ESG.

It is an important core of corporate sustainable operation to consciously incorporate talent development and leadership cultivation into the strategy of corporate sustainable operation, regularly adjust the talent development strategy in response to changes, continue to cultivate potential talents of the enterprise, and cultivate leaders who have the ability to quickly respond to market changes, high adaptability, and large-scale thinking. If we can discuss the talent development needs of the enterprise with external strategic partners, plan the short, medium and long-term talent development goals from the perspective of strategic thinking, and plan the growth path and solutions according to the needs of different classes, we can make the company continue to move forward in the pace of sustainable development.