How can L&D help a company in ESG reporting?
Businesses are facing a dynamic environment today, whether it’s due to the pandemic or otherwise. They have to comply with the environmental, social, and governance(ESG) framework, which implies that the businesses have to reveal data about their operations covering all these three parameters. Many laws cover the ESG domain, and they are made compulsory by the government. All these laws govern how the environmental, social, and governance of the business affect everything.
What is ESG?
In brief, as far as the environmental effects of ESG are concerned, they include the usage of water, management of wastewater, and other pollutants. The company has to set goals for reducing emissions and pollutants.
The social aspect of ESG includes what the DEI practices of a company are and how well it treats its labor. The company should make sure that all the employees are treated equally and justly in the company. A company should also play its role in solving community issues as a part of societal performance.
Companies need to disclose all this behavior accurately in the ESG report, which can also be audited. When such reports are audited, they enhance the trustworthiness of the company.
The last part of ESG, the governance practices, deals with the compensation of different executives and the anti-corruption laws of the company. The company must have laws for punishing corrupt behavior.
No company can ignore the importance of following ESG because not doing so can have a lot of negative consequences. Corporate social responsibility involves businesses not damaging the environment through their operations, and hence, they are not liable to pay heavy fines. The employees also feel pleased working in a company which is playing its part in the social benefit. Hence, businesses are investing a lot of money in having processes with a lesser carbon footprint.
Is learning and development of any use?
The Learning and development of a business can ensure that when it is focussing on the social impact of its operations, it does not have an effect from the governance perspective. Even if one aspect affects the other, the business should be prepared for such tradeoffs.
For example, during the pandemic, some of the businesses suffered due to the safety requirements, which were part of the social aspect of the ESG. There were a lot of problems during the pandemic when the companies could not become agile enough in their production. The companies faced a lot of stress between managing their social responsibility with respect to worker safety and having an agile production structure. They faced many problems because the workers were not able to change themselves as per the OSHAS 18001 requirements.
There was a stringent implementation of the OSHAS 18001 standards, which mandated that the workers wear personal protective equipment during work to prevent any incidence of COVID-19. This slowed the production of many companies, especially manufacturing units.
The importance of this rule is that it prevents any compensation from being paid to the workers due to their absence from the job due to the COVID-19 ailment. But, when Learning and development are implemented in a company, employees can conform to the rules without letting productivity be affected. Through L&D, they gain a lot of expertise in doing their jobs despite the restrictions. Moreover, L&D could help workers cope with the psychological stress caused by environmental governance, like the threat of disease.
What is ESG reporting?
Any organization needs an external L&D partner for this purpose so that it can have workshops created about the problems faced in such reporting and the important topics. It can also teach employees about the reporting templates created by the Sustainability Accounting Standards Board(SASB).
SASB has established different requirements for various kinds of industries, including manufacturing technology and healthcare, depending on the production requirements in such industries.
The main problem with ESG governance is the reporting of aspects like carbon emissions. Hence, the staff has to be thoroughly trained in them depending on the requirements of the industry. The company has to decide how the staff will aid in such reporting. It has to be taught the template of the reporting, depending on the guidelines established. If the ESG reporting falls short of such guidelines, there can be effects. The training for such reporting will include the involved staff and the content.
The leaders must take part in the L&D initiative for the ESG reporting.
The employees must know what the stakeholders expect from such reporting and how the process will take place. They must also know the logic behind such reporting. The major stakeholders who are interested in the environmental choices of a company are its investors. They don’t want to invest in companies that are harming the environment.
Hence, when SASB releases such data, it helps such investors make informed decisions. Apart from being necessary for compliance, companies need to be sustainable also because they have to survive in a society, and no business can afford to turn society against it. When the staff is taught through L&D about ESG reporting, it gets a better insight into clean production and how they can be more responsible towards a better environment.