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27 Sep 2022
by Debi O'Donovan

REBA Inside Track: The challenge of matching corporate ESG messages with reward strategy

Corporate messages about ESG and green issues tread a fine line when the biggest issues of the day are the cost of living crisis

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Increasing numbers of organisations have put out strong corporate messages about their purpose linked to sustainability and environment, social and governance (ESG). But how these need to play out in messages to employees is less clear.

This is the sensitive spot where many reward and benefits professionals are finding themselves because corporate messages can be hard to translate into people practices, never mind made relevant to the day-to-day lives of employees through their benefits and pay.

Speaking to a group of a dozen reward and benefits directors last week, it was clear that sustainability or ESG is very much on current ‘to do’ lists, largely driven by pressure from corporate leadership.

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Employees want more ‘green’

There is also demand from employees for employers to be more ‘green’, but this appears to be mostly centred on the actions they expect from the organisation rather than how employees themselves behave. Just a minority of employees appear to be willing to sacrifice their own lifestyles or discretionary spend to support sustainability.

No wonder reward and benefits professionals are having to tread this line so carefully.

Pulling together, and making the ESG links to and between, existing employee benefits and reward practices is a huge, complex task given the myriad of benefits on offer these days.

Many of the employers I have spoken to are still at the start of this journey, simply trying to audit what benefits or pay strategies need adapting, adding too or are already fit to link to existing corporate messaging.

For those further down the line, putting all elements into a sustainability narrative that doesn’t overwhelm employees to the point they stop listening is where some are currently stumbling. All this good work in reward can fall on deaf ears. Or even worse, cause a negative reaction among staff, especially the lower paid, who wonder why the organisation is focusing on external sustainability issues during a cost-of-living crisis.

Back to basics strategy

For every organisation the solution and pressures will be different, but the common theme I took away from conversations is that the workforce should be seen as the target for corporate sustainability and ESG objectives in the first instance. That is, be paid a fair living wage with employers truly caring for their welfare.

It is back-to-basics reward and benefits strategy before looking at the extras. New green, diversity, equity & inclusion and hybrid working benefits have their place – but only on top of a strong reward foundation.

The sustainability messages might appear innovative, but as with so much in life, keeping it simple is the hardest thing to do.