Worker Engagement a Key Driver of ESG

ESG initiatives and worker engagement go hand in hand.

Environmental, social, and governance (ESG) criteria are a set of requirements for a company’s behaviour that are used to assess investments by socially concerned investors. These criteria also play an important role in determining how a company’s good corporate citizenry conduct is viewed by a wide range of stakeholders.

More specifically, environmental criteria assess how a corporation protects the environment, such as a corporate policy addressing climate change. Social criteria look at how the company maintains connections with its workers, suppliers, consumers, and the communities in which it works. Governance is concerned with the leadership of a corporation, executive remuneration, audits, internal controls, and shareholder rights.

New Generations Bring New Expectations

By the end of the decade, 72% of the global workforce will consist of Millennials and Gen Z. These generations place a far greater emphasis on environmental and social issues than any of their predecessors in the workplace ever did – thereby ramping up expectations on companies to take a positive stance on these matters.

A company’s ESG performance will increasingly become a competitive advantage in the field of talent retention and attraction. In particular, this generation of socially conscious employees wants to see action by its employer on the following issues:

  • Protection of biodiversity
  • Climate change
  • Extreme weather
  • Human-made environmental disasters
  • Natural disasters

It’s also highly likely that aside from global challenges, as listed above, there will be growing expectations from employees that companies need to positively impact the communities in which they operate.

ESG and Worker Engagement

High levels of interaction with all stakeholders, particularly workers, are encouraged by effective ESG practises. When a firm implements ESG practises that focus on social and environmental good, it drives both worker engagement and loyalty, which contributes to overall workplace success and productivity.

Worker relationships (supplier contacts and linkages, customer service, and participation with the local and global community) are critical to ESG sustainability. As a result, from an ESG standpoint, the primary stakeholders for every firm are its workers. This is evidenced by the fact that employers with the highest ESG ratings perform 14% better in terms of worker satisfaction and are 25% more appealing to potential workers than the average.

Building Worker Engagement via ESG

The concept of ESG means different things to different companies. For some companies the use of renewable and sustainable energy resources is critical while other organisations will prioritise worker safety, health and overall well-being as part of their ESG programmes.

Where companies would like to direct their focus and how they approach programmes is often unique, based on the goals of the organisation, and dictated by their specific operating environments.

Companies can kick start their worker engagement around ESG by adopting some of the following approaches, which will help them flesh out their ESG engagement frameworks:

  • Leverage existing communication channels to provide workers with content around ESG principles already adopted by the company or principles you intend to adopt.
  • Use surveys to gather information and use the power of recognition to get people involved in sharing their views on the company’s approach to ESG.
  • Once you have determined what your workers’ views are on your ESG approach, fill in any possible gaps in their understanding by building up their knowledge base.
  • There are many ways to develop content for your worker engagement program. Strategically align the content approach with your ESG goals and leverage existing knowledge (adding external expertise where needed), to customise approaches for your company.
  • Increasing your workers’ ESG IQ (through knowledge sharing) can motivate them to consider how your firm can operate with less environmental impact, which encourages business innovation and boosts worker morale.
  • One of the keys to improved worker engagement is psychological safety. Innovative cultures take root in environments where worker engagement is encouraged and individuals are willing to ‘risk’ sharing their opinions because they know their views will be objectively assessed. A creative and innovative workforce, built on the basis of an engaged workforce, can be an important factor in a company’s ability to hit its ESG goals.

Business leaders do not need to feel ‘alone’ when considering company ESG goals. By activating the strengths of their workforce, they can navigate a potentially new landscape, while simultaneously improving employee engagement.

Making ESG a Reality

The actual implementation of an ESG strategy can often be challenging and by giving consideration to the following issues, a company can ensure that its ESG programmes and worker engagement get off to a positive start:

  • Deal with ‘So What?’ attitudes upfront –each worker must understand what your ESG strategy means for them – and what they are accountable for in order to help make it happen.
  • Move beyond simple compliance – using ESG to improve worker engagement is likely to fail if it is viewed as just demanding certification, compliance and supervision. Leaders ideally want workers to embrace ESG not because of ‘rules’, but because it is part of the company’s everyday culture.
  • Drive top-down and bottom-up engagement – frontline workers must be involved in generating ideas to bring ESG to life – which means they get to participate in helping to solve some of the most pressing challenges facing our society and our planet.
  • Position ESG as a resilience-building tool – ESG can prepare workers for a future disruptive event such as another pandemic, financial crisis, or significant social shift, it must also rally workers into conscientiously embracing personal responsibility for high-impact areas such as climate change, workplace diversity and responsible consumption.

By paying careful attention to these issues a company can improve its chances of successful ESG programmes that enhance overall worker engagement.


Identifying and retaining top workers is becoming increasingly critical and challenging for businesses. Prospective and current workers make brand decisions based on a company’s environmental and social principles in the same manner as customers do. That is why a good ESG plan that allows for employee participation will increase worker engagement, benefitting not only your employees but all of your company’s major stakeholders.