How a strong ESG culture can help companies attract and retain top talent

Derrick Emsley, CEO of TenTree, says most people know his company plants trees with every purchase.DARRYL DYCK/THE GLOBE AND THE MAIL

Eco-friendly retailer Tentree doesn’t have to advertise its carbon-reduction efforts to potential recruits. Most applicants know the Vancouver-based company’s values ​​and mission, including the trees it plants with every purchase, and seek to join the company in part because of that, says the founder and CEO. director Derrick Emsley.

“A lot of people come to us because of the impact we have,” says Emsley. “We are fortunate to have many applicants for virtually every job and to have very low employee turnover by industry standards.”

More and more companies like Tentree are learning that sustainability isn’t just a customer-driven proposition.

Research shows that employees care more than ever about the environmental impact of their workplace and are willing to stay longer in jobs where they feel they are helping to make a positive difference.

A PwC survey last year found that 86% of employees “prefer to support or work for companies that care about the same issues they do”, and that 84% are more likely to work for a company that champions causes. environmental .

A 2020 study by Marsh McLennan on Environment, Social and Governance (ESG) as a workforce strategy found that strong policies in this area can be a “key lever in an age of turnover.” unpredictable and fierce competition for talent”.

The article cites previous research that found that satisfied employees “work harder, stay with their employer longer, and seek to produce better results for the organization,” noting that by 2029, millennials and Gen Z workers – groups who care more about ESG than their predecessors – will make up 72% of the global workforce.

“It’s a hard thing to quantify. [but] anecdotally, we find that our team is much more engaged, stays with the company longer, and is much more enthusiastic about sharing the impact of their work with family and friends,” says Emsley. of Tentree.

The company is on the road to carbon neutrality, which required an in-depth analysis of the company and its partners. It also continuously updates its goals and plans in light of changing sustainability information.

For other companies hoping to reduce their emissions, experts recommend starting by measuring their current impact.

“How do you measure success?…First you have to know where you stand,” says Rafiq Dhanji, executive director of Sustainability Leadership, a Hamilton-based organization that helps local businesses become more socially sustainable. environmental, economic and social.

“A lot of people step in and then try to figure out whether they’re successful or not,” he says.

He suggests starting with basic questions such as: How much electricity do you use? How much natural gas do you use?

To compare the effect of a company’s use of different types of resources, Dhanji suggests using an online calculator such as Carbonzero.ca to generate metrics that allow comparison. Even a small amount of gas use can be much worse in terms of emissions than a larger amount of electricity – especially in places where much of the energy available comes from renewable sources – so it can be difficult to assess emissions without a shared metric, he says. .

His organization has developed a program that guides companies through the process. He discovered that many small businesses have good sustainability intentions, but few staff take on many roles. It may therefore seem difficult to commit the resources.

“We realized that small and medium-sized businesses needed… guidance. Many organizations are struggling to stay alive and keep their doors open,” he says. “It’s very difficult to divert your attention to something else that seems to require a lot of concentration. Our theme this year is “Begin…” You don’t have to wait for the right set of circumstances.

At Tentree, Mr. Emsley explains that each sales department sets short-term and long-term goals each year.

“There are projects and things we can work on that will have a significant impact immediately, and then there are longer-term projects like [changing our supply chain and] implementing new fabrics and materials,” he says.

One area Tentree often revisits is the amount of product transported by air, Emsley says, noting that freight being shipped is more environmentally friendly, but air travel is sometimes necessary to avoid delays in the supply chain. current supply. He points to going for sustainable web hosting and reducing car journeys as other hidden areas where businesses can often reduce emissions.

Once Tentree has reduced as much as possible in a given area, it then buys carbon offsets to cover the rest, Emsley adds.

And, as the name suggests, his company plants 10 trees for every product sold. However, it does not count these trees in its calculations of carbon neutrality.

The organization also recently launched a new venture, Veritree, which aims to help other companies incorporate tree planting into their own models, which its website notes can help engage stakeholders and consumers in the business.

Employees who see that the company has a clear direction on its sustainability initiatives are more likely to be significant contributors, Dhanji notes. The extra employee dedication means less turnover, which translates into cost savings, he adds, noting that it typically costs around $1,500 to replace an employee, including staff time for the recruitment and training.

“You don’t have that recruiting cost, but you also attract really good talent,” says Dhanji. “[There are] organizations that barely advertise their roles, and as soon as they do, they are inundated with applications.

Dan Zitting, director of product and strategy at Diligent, which makes governance, risk and compliance software, says well-documented environmental achievements are increasingly important to consumers, investors and employees.

To drive change within a company looking to reduce emissions, he suggests starting with a hard-hitting, short-term business goal, such as attracting a certain type of investor or becoming carbon neutral, and structuring a plan around it. of that.

Setting the tone from the top is key, so employees understand the company’s vision and feel empowered to make decisions that help the company achieve its goals, he says.

“Often the easiest thing to do is to write a simple one-page manifesto [describing] what kind of business [you] want to be… and how [you] expect employees to take action,” he says.

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