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Keeping you in-the-know on environmental, social and governance developments

The third in a series looking at groups generally thought to benefit from corporate ESG programs, examining which group may be the primary beneficiary of company ESG efforts. Part 1 dealt with investors (with an addendum here) and Part 2 on Customers is here.

Employees Do Better …

Employees are a significant stakeholder in the companies they work for. Companies generally understand this and most make employee happiness a priority. The “war for talent” exemplifies corporate thinking about attracting and retaining employees, and the “S” in ESG from the employee perspective. Productivity, better pay and benefits are but some ESG elements companies implement to care for their employees. For instance:

  • Diversity, equity and inclusion (DEI) initiatives benefit employees from diverse backgrounds by providing access to job opportunities, new industries and higher levels within organizations
  • Employees receive better pay and benefits which have health, wealth and wellness implications for employees and their families
  • Pay equity programs benefits those previously underpaid
  • Employer child care options benefit employees not only by reducing child care costs, but also by giving employees more freedom and flexibility to pursue additional education, promotions and be more productive.

… And Feel a Sense of Belonging

Pay and other financial incentives associated with ESG programs directly benefit employees. Yet there are indirect – but equally powerful – motivators that employees value. In supporting environments, employees:

  • Gain a sense of feeling safe, respected and connected
  • Feel like they belong and are in a place that offers psychological safety
  • Emotionally support a company’s mission or products, such as those with distinct environmental benefits or ethical supply chain practices

In sum, employees are happier and gain a great deal as major beneficiaries of corporate ESG programs. But are they the ones who receive the most? Our series will continue by exploring external stakeholders.

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The Editor

Lawrence Heim has been practicing in the field of ESG management for almost 40 years. He began his career as a legal assistant in the Environmental Practice of Vinson & Elkins working for a partner who is nationally recognized and an adjunct professor of environmental law at the University of Texas Law School. He moved into technical environmental consulting with ENSR Consulting & Engineering at the height of environmental regulatory development, working across a range of disciplines. He was one… View Profile