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i4cp Study: HR has a Substantial Role to Play in ESG

New data from the Institute for Corporate Productivity (i4cp) shows that companies’ environmental, social, and governance (ESG) commitments have positive impact on business outcomes, but only when progress is being made on those goals. To ensure such progress, organizations need both the right structure and oversight of sustainability agendas, and the involvement of HR to help embed ESG into talent practices.

Where does ESG reside?

Data from i4cp’s research shows that organizations that have made progress on ESG goals have dedicated cross-functional teams or a single office to drive strategy—beyond the board of directors’ role.

In fact, high-performance organizations are nearly 7X more likely than lower-performing organizations to rely on cross-functional teams dedicated to ESG strategy.

High Performance Organizations are more likely to have a dedicated team charged with ESG

Among just those organizations that have made major progress on ESG commitments in the past two years, the following functions are represented on the majority of cross-functional teams:

  • 80% included HR as part of that team
  • 70% included sustainability
  • 60% included legal and public/corporate affairs

HR plays a strategic role

i4cp’s data shows that the more involved HR is in designing strategy in environmental, social, and governance areas, the more likely organizations are to have also made significant progress on their ESG commitments over the past two years. Among organizations that are making major progress on ESG goals, 79% said HR is highly involved in designing strategy for social goals and programs, 29% reported HR is highly involved in governance goals and programs, and 18% said HR is highly involved in environmental goals and programs.

ESG and workforce strategy

HR plays an important role in ESG progress because it is uniquely positioned to embed ESG programs into talent practices and track and measure the outcomes of those strategies. Survey respondents from organizations that purposefully factor ESG goals into their workforce strategies are statistically more likely to report making major progress than those that didn’t.

i4cp’s study also included dozens of interviews with leading HR and sustainability leaders, many of whom underscored the importance of aligning ESG goals to organizational purpose and values as a means of making progress on those commitments. Such alignment drives strategy and helps explain why an organization has identified specific commitments over others. Embedding descriptions about ESG goals, and activities to support them, throughout the employee lifecycle can then make enterprise-wide environmental and social goals tangible and top-of-mind for employees.

More ESG research

i4cp members: read the full ESG Brief for more detail on how organizations are pursuing their ESG goals, recommendations to embed ESG in talent practices, and additional insights from Katheryn Brekken.

Not a member?

Learn more about enterprise membership benefits for your HR team, and contact us to get started.

Katheryn Brekken, Ph.D.
Katheryn Brekken, Ph.D., is a senior research analyst with the Institute for Corporate Productivity (i4cp). Prior to joining i4cp, she served as an assistant professor of research with the MGM Resorts Public Policy Institute at the University of Nevada, Las Vegas School of Public Policy and Leadership, where she continues to lecture. She has worked closely with government and corporate leaders to develop and evaluate education and training programs and as a policy advisor. She has over 15 years of experience in public affairs and has testified before legislative bodies on matters of higher education and workforce policy. She is published in various academic journals including Politics & Policy, Community College Journal of Research & Practice, and State and Local Government Review. She received her Ph.D. in Public Affairs from UNLV.