In today’s business climate, there is more to a successful operation than a positive balance sheet. Companies must also prove that they’re considering additional stakeholders in the way they do business, like their employees, customers, and the wider community.
These metrics are referred to as ESG, short for environmental, social, and governance factors. These non-financial elements can help an organization to identify growth opportunities and risks within their business. And as you create your ESG plan, you can learn a great deal from the people who know your business best—your employees.
Environmental Factors
The environmental part of an ESG plan may be the easiest to quantify. It includes initiatives to address issues like:
- Limiting carbon emissions
- Supply chain sustainability
- Water pollution and scarcity
- Deforestation
The hospitality industry has the potential to be highly wasteful, due to the amount of cleaning and single-use items that can be required. Still, many hotels already have policies in place to reduce waste (and the associated costs). For example, some hotels only replace towels that have been left in the bathtub or on the floor to indicate that the guest won’t be re-using them.
To find additional opportunities for environmental policies, talk to the people who see the most waste, like housekeeping and restaurant/bar staff. Housekeeping may see opportunities for waste reduction after observing what in-room products do and don’t get used.
Procurement is another opportunity. With more and more zero-waste or zero-emissions brands on the market, your procurement department may relish the chance to shop for more sustainable products and packaging for your business.
Social Factors
The social health of your company can be more difficult to assess. To explore accurately, getting input from your employees is a must. This sector includes issues like:
- Diversity, Equity, and Inclusion (DEI) policies
- Mental health
- Community relations
- Company sexual harassment policies
- Fair labor practices
We’ve all heard stories of brands who’ve had large blind spots in these areas, and they don’t wake up to the problems until an embarrassing story hits the news. Speaking to your employees and enacting policies in this area is crucial for both the long-term success of your brand AND for the happiness and well-being of your employees.
One of the most important aspects of strong social policies is a safe method of making complaints. No employee will feel comfortable speaking to their manager if the manager is the person causing the problem, or if they have to fear retaliation.
Social improvement is not a one-time event. A single town hall won’t suffice. Instead, brands must build DEI policies and fair labor practices into their hiring and management policies. This includes creating avenues for staff complaints and suggestions, so brands can discover where they’re falling short.
Governance Factors
ESG is not entirely an operational consideration. It touches the highest levels of the organization, including the board of directors and company executives. It includes factors like:
- Board of directors and its makeup
- Political contributions
- Hiring and onboarding policies
- Executive pay policies
All too often, these governance issues are treated as separate from the operations of the business, leading to companies that claim certain values while demonstrating the opposite. A company that pays lip service to diversity but has an all-white, all-male board of directors calls its stated values into question.
Similar can be said for the company’s political contributions. A brand that purports to prioritize the environment cannot then donate to politicians or causes that actively oppose sustainability efforts without losing credibility.
How can employees help? By giving staff a chance to make their voices heard, leadership can learn what causes are important to the team and take them into consideration when planning political or even charitable contributions. They can also help leadership to find opportunities for improving onboarding policies and finding gaps in training.
ESG Can Reduce Risk and Create Value
ESG initiatives are not simply about public relations. They can create real monetary value for brands, both through lower costs, exposure to new markets, and greater employee engagement and retention.
And by asking for employee input into these policies, you encourage your team to be active creators of the company’s future.