Future of work trend #4: Sustainability
Organisations across the Asia-Pacific increasingly see addressing Environmental, Social and Governance (ESG) issues as core to their strategy. Not only is it time to act on the path to net-zero – it is the key to opening up access to capital, new markets, customers, and talent.
Now more than ever, business leaders recognise the growing risks of climate change. From bushfires in Australia to floods in Sri Lanka or China, these threats are now impossible to ignore. There is also greater awareness of an organisation’s impact on social equity – such as the social cost of unsafe work conditions. Among large firms in the Asia-Pacific, 33% now have a named sustainability lead, and 41% have set a carbon-neutral date. A report from financial analysis provider MCSI showed the rate of improvement in the average ESG score in its APAC Index was faster than the MSCI Average Country Weighted Index from 2018 to 2021. That means the region is catching up with the rest of the world in this area – fast.
Demand for companies to act will only continue to grow in 2022. Globally, nearly 6 in 10 consumers are willing to change their shopping habits to reduce environmental impact – and 71% of professionals say they would consider taking a pay cut to work at a company that aligns more with their values.
Whether driven by government mandates, investor pressure, or customer and employee demands, it’s a positive step change. And it will inevitably impact major sectors across the region, whether it’s the rise of electric vehicle production or increased focus on addressing biodiversity challenges in the consumer staples and agricultural sector.
To react to these changes organisations are adjusting their business models and making technical or reporting changes. However, that is not enough. It is imperative to put ‘people’ at the heart of sustainability initiatives. To do so, it is critical to answering key questions:
1. Purpose – Why are we doing this, who are we trying to satisfy, what is our time horizon, and how do we measure success?
2. Governance – How does our board need to evolve to oversee, enable, and support the delivery of our ESG strategy?
3. Leadership – How do we attract, develop and retain the leadership, talent and skills needed to drive ESG strategy and outcomes?
4. Operating model – How do we organise our resources to deliver our ESG strategy? Do we need to change job descriptions and career paths, and invest in new skills and technology?
5. Culture and mindset – How do we create the right culture and mindsets, engage our people and reinforce the right behaviours?
To make real and tangible change happen, you need to empower everyone across the organisation to deliver on your ESG strategy. A recent survey found 65% of employees across six APAC countries are unaware of their companies’ carbon reduction goals. You and your team need to be on the same page. And that starts with aligning employee goals with your purpose – and making your efforts more visible.
One of Asia’s largest investment companies is answering the call with a clearly stated sustainability journey. It lays out the steps the organisation is taking to help create a greener future. Internally, employee incentives and rewards are aligned with strategic organisation-wide ESG goals through carbon charges against portfolio performance that reduce the incentive pool, as well as establishing carbon abatement goals in long-term incentives from 2021. The company is also tracking portfolio emissions and building partnerships to fund net-zero emission efforts.]
If your company wants to be truly future-ready, it needs to act on the sustainability imperative – and harnessing the commitment of your people is a key success factor. There are already shining beacons right here in Asia that you can take inspiration from.