While many organisations are actively making strides in the realms of aligning HR with business objectives, many are failing to meet the increasing demands of corporate sustainability, writes Gareth Bennett
Many organisations are failing to meet the increasing demands of corporate sustainability, writes Gareth Bennett
“Institutions that operate so as to capitalise all gain in the interests of the few while socialising all loss to the detriment of the many are ethically, socially and operationally sound” – Dee Hock, founder, president and CEO emeritus Visa International
The HR profession has undergone many changes of role, emphasis and relevance in recent years. There has been the welcome move from ‘welfare and sticking plaster’ to a much more strategic and integrated business role, along with a shift from ‘policing’ to business partnering. We’ve also seen the shift from every company having its own HR to a progressive march of outsourcing everything from payroll to executive remuneration.
However, the biggest potential change of all is not really recognised as a HR issue, and therein lies a threat or opportunity. In most companies, the HR department can be doing an outstanding job and achieving its objectives. So can all those people working in marketing, public affairs, finance and so forth. However, that traditional structure with traditional responsibilities fails to meet the increasing demands of corporate sustainability.
Why is this important? Just look at the growing number of surveys – from the Dow Jones Sustainability Index to Reputex – which are reporting on sustainability. Look at the legal, regulatory and reporting requirements now becoming common in the US, Europe and latterly in Asia Pacific. Look at the increased awareness and demands of socially responsible investment, of lobby groups and shareholder action groups. Look at what customers are now demanding of companies, what communities expect, what motivates employees and what factors influence potential recruits to join one company rather than another.
HR can, and should, take a leading role in addressing the issues posed by corporate sustainability. However, this involves breaking out of the silos of our traditional functional roles and working in a truly integrated manner across the corporation. HR has become the change champion, and by fostering strategic health, safety and environmental frameworks, socially responsible initiatives, appropriate risk management, education and awareness, we can now rise to the challenge of helping our companies become more sustainable.
Integrated, leading-edge HR practices are an essential part of creating the values-based culture which ensures that sustainability becomes ‘the way we do things around here’. This means working for all stakeholders – that is our shareholders, our customers, our employees and the communities in which we are based. This is not only a question of governance, or meeting changing requirements, or winning the war for talent, but is critical in building sustainable competitive advantage and an investment premium.
Gareth Bennett is group manager of People & Culture for the Australian Gas Light Company (AGL) and a member of Human Resources editorial advisory board
