New member paper: ESG, SDGs and HR: A positive post-pandemic partnership
21 Jul 2021
In this paper, Duncan Brown looks at the rise of environmental, social, and corporate governance (ESG) investing and its potential to shape the future work and influence of the HR profession.
Environmental, social, and (corporate) governance refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business. Analysis of these criteria is thought to help to better determine the future financial performance of companies.
At the national level, SDG is the equivalent acronym for the pursuit by governments of a broader agenda beyond the purely economic. The UK government is a signatory to the 2030 Agenda for Sustainable Development adopted by world leaders at the UN General Assembly in 2015. This is a ‘broad and ambitious’ plan of action on the three themes of prosperity, people and planet, aiming to move beyond the traditional narrow focus of governments on GDP growth. These themes are broken down into 17 sustainable development goals (SDGs) and 169 targets, with the overarching objective of ‘leaving no one behind’. The people goals include ending poverty, decent work, gender equality and reducing inequality.
At the employer level, ESG-driven investing reflects the agendas of traditional environmental and human rights charities, with one explaining ‘sustainable business models will drive a circular, sustainable economy’. But also, as a financial services company trumpets in its recent advertising, ‘the sustainability revolution is the largest investment opportunity in history’, holding out the prospect of societies and individuals being able to achieve high investment returns and long-term wealth to the mutual long-term benefit of civil society.