ESG Has a Side Effect: Great Green Employee Engagement

New compliance requirements for listed companies in Hong Kong make sustainability reporting and initiatives essential. Interestingly, they also find that these offer excellent opportunities to drive employee engagement.

At the recent sustainable business forum ReThink HK, business leaders shared their experiences of turning this once compliance-driven initiative into a purpose-centric, employee-engaging, impactful journey.

“We’ve seen this tremendous shift of companies from being compliance-driven into being serious with delivering impactful sustainability results,” said Pat Woo, head of ESG Hong Kong at KPMG China. The firm provides consulting services for businesses to design and execute environmental, social, and governance (ESG) strategies.

Woo said when HKEX first required sustainability reporting, most companies’ go-green initiatives were merely for compliance reasons. After over seven years, many realize consumers, investors, and employees are taking sustainability seriously. Businesses can no longer afford to pay lip service.

"There is also a concern of greenwashing," he said. "Companies must have their internal and external communications aligned; otherwise, there is a huge reputational risk."

Relatable and actionable

“Younger talents are looking for companies that align with their values,” added Piyush Srivastava, managing director of Pernod Ricard Hong Kong and Macau. He said businesses committed to their sustainability messages involve the entire company to take tangible actions.

The global wine and spirit company is recognized as a United Nations Global Compact LEAD participant for its alignment with the UN’s Sustainable Development Goals (SDGs) and 2030 plan. Srivastava said the company’s four pillars of sustainability roadmap focuses not only on the production and supply chain but also on valuing people—empowering people within and across its supply chain. 

To turn Pernod Richard’s 2030 roadmap into relatable actions for its team, Srivastava said the company organizes the Responsib’ALL Day when the entire company is dedicated to sustainability. Employees designed and participated in these tangible projects, from planting trees and renovating green urban spaces to collecting waste from beaches.

Seeing is believing

On top of volunteering for sustainability initiatives, more employees are also encouraged to participate in the ideation of the company’s green strategy.

At Cathay Pacific, employees highlighted the waste management issue to the airline’s executive, noted Aldric Chau, the airline's general manager for digital. He said at a recent leadership conference, the sustainability team developed a showcase area to display all the waste generated by a single Hong Kong-London flight.

“When the leaders can visualize and see the amount of waste produced simply from one single flight, they were able to understand the impact and started to think about how things can be done differently,” said Chau.

Bottom-up ideation

Front-line employees with hands-on operation experience are often in an excellent position to ideate for a green strategy, especially when offered a platform. Chau said one of the cabin crew members has been an evangelist for reducing the use of plastic, and she realized the use of plastic bags during the collection of clean uniforms from the laundry department. With a chance to raise her concerns and suggestions, the company is now encouraging crew members to use personal garment bags to replace plastic bags.

"Many of these amazing ideas can come from the front-line team when the leaders have set the vision and when the employees are given the freedom to execute them," said Chau.

A similar collaboration of top-down vision with bottom-up ideation of sustainability initiative is also found at MTR Corporation Limited (MTRCL), according to Gene Soo, head of ecosystem, global innovation.

One of the examples is Carbon Wallet (CW), a one-stop green lifestyle reward platform launched by the public transport operator. The mobile platform allows users to track their reduced carbon emissions and earn CW points by taking part in different green actions, like traveling on low-carbon MTR transport, recycling, and dining at vegetarian restaurants. Points earned through the platform can redeem rewards from sustainable brands.

Soo said while the executives initiated the vision of promoting a green lifestyle, younger professionals within the company were encouraged to develop different campaign ideas. Some gamification ideas of earning CW points from recycling cosmetic containers or refilling water bottles were generated from a bottom-up approach.

“The top could be pushing the vision and targets, but the bottom should also have the freedom and the space to imagine what can be possible,” said Soo.

Expanding/extending enthusiasm

Despite the rising awareness of sustainability, employee participation is not always easy.

“When we propose the idea of sustainability, almost 100% would support that. But when it comes to actual implementation or participation, there are often a lot of reasons or excuses,” added Chau.

He quoted an example when the company was planning to develop a rooftop farm, the team received multiple setbacks and concerns—like collapsing rooftops or typhoon damage. Focusing on objectives and the mission, the company went ahead with the project by involving different senior management and multiple departments to participate as organic farmers.

“Sometimes we have to accept the fact that there will be a small population that is not with you,” he said. “But focus on influencing people on the fence and those with a positive attitude.”

Walk the “money” talk

Woo from KPMG noted companies are likely to face more challenges as they are putting the hard work into driving impactful sustainability results, compared to merely filing sustainability reports. 

Woo said offering incentives, measurable results, and good communication are essential to drive employees' participation in the company's sustainability effort. At KPMG, to encourage low-carbon travel, the company develops incentive plans for employees to take high-speed rail instead of flights, particularly among the popular travel routes between Shanghai and Beijing.

Aiming to encourage employees to think twice about traveling, Woo said the company also introduced a carbon price of USD20 for every ton of carbon emitted during a trip. These internal charges are consolidated into a fund for sustainability initiatives. But this charge means every travel decision is aligned with an additional cost, potentially impacting the departmental KPIs.

On top of allocating costs and incentives to drive sustainability awareness, Woo said communication is by far the most important. With centuries of history to operate a fossil-fuel economy, business leaders must be able to educate and explain the transformational changes required.

“ESG is about changing the way we do everything; it is a paradigm shift in how we operate our lives and businesses,” he concluded.

Sheila Lam is the contributing editor of CDOTrends. Covering IT for 20 years as a journalist, she has witnessed the emergence, hype, and maturity of different technologies but is always excited about what's next. You can reach her at [email protected].

Image credit: iStockphoto/LuckyBusiness