ESG Practices & Green HR Practices
The high rate of carbon emission is a panic alarm for the regulatory authority. In most of the Indian companies, if ESG part is seriously audited, then the result is very grim. Most of the ESG Auditors are not properly trained in human resource practices, so they are unable to audit effectively the "Social" pillar in the ESG Part and capture the gaps in the ESG practices. Many environmental compliance issues are related with the social administration involving the human right. This is demonstrated here how green HR practices have dominant role in attaining the ESG Goal. In other words the Green HR practices are completely needed to achieve the ESG Goal.
This is only HR which has wide responsibility to achieve the ESG Goal inside a company. This job is entirely HR job. There is a wide skill gap in the HR professionals, who have little idea about the job description of the ESG professional. They shift and throw the jobs on the other shoulders. This has nothing to do with the engineering skill. They have been conducting the job to ensure the "Lean Culture" practice inside the company to eliminate wastage. This is pure HR administration job, which touches the dimension of the human resource compliance to the environmental compliance. The second pillar "Social", completely moves around the HR practices and labor law. Then what engineer shall do here, if he has poor labor law knowledge ! He will invite only disaster and nothing else.
HR practices in the area of recruitment, selection, induction, training, performance, job design, job analysis, employer branding, HR planning, career management, pay and reward management, incentive management, health and safety management & grievance management are wide arena of green HR practices, which reduce effectively the carbon emission. Such reduction in carbon emission brings strong sustainability and good ESG practices.
Strong ESG Practices For Employer Branding:
Douglas Renwick with others have reported in the year 2012, that the British Carbon Trust in a study has found that 75% of 1018 employees consider carbon reduction policy as a good criteria to select a job. This is nothing but excellent effort of employer branding. Indian researcher Venkatesh with others have also found similar result in 2014. Bansal and Roth in 2000 also reported that 50% MBA students are ready to take the low salary position for environmental friendly organization and has attracted high-quality staff. Brekke and Nybord in 2008 & Jacob in 2012 also found that the employees choose socially responsible industry even if salary were slight less. In other words large scale expenditures can be curtailed on the front of employer branding if alone ESG Practices are honestly followed. Shoeb Ahmad, demonstrated that the German firms like BASF, Siemens, Mannesmann are using ESG practices to acquire good talent. Another researcher Gill Mandip says that such green practices reduce training cost also.
When the company is struggling to achieve the ESG Goal. The HR managers are duty bound to remove carbon emission from the various HR practices. In recruitment process wide scale of wastage is seen. Indian companies have no culture to remove this bad practices which is increasing high rate of carbon emission. Paperless recruitment process is just a dream in the Indian companies. "Lean Culture" practices for developing "online" recruitment practices are rarely seen. Poor campus hiring practices or say bad practices of recruitment have generated high rate of carbon emission. Similar poor approach is seen also on the performance management.
Strong ESG Practices Through Skill Matrix:
Companies where "Five-S" ( 5S ) practices are strong, at that side wastage is not seen. South Korean MNC companies and the Japanese companies are placing maximum efforts to generate strong culture on the Five-S ( 5S ) practices. This culture is generated by the HR department. The 5S, practices touch down the corner stone of the ESG Goal. Employees from top to bottom are expected to do Five-S ( 5S ) practices which drive low waste generation or zero wastage. This is reported that the company not practicing 5S culture generate more than 60% wastage. The value addition is just only 30 to 40 %. The high rate of wastage due to poor HR practices for not implementing strongly the 5S culture increases high rate of carbon emission. Ultimately the low waste generation or zero wastage, helps to achieve the ESG Goal. The "Five-S" and "ESG Goal" are essential skill which is seen absent or missing in the skill matrix of most of the Indian companies. This is seen completely missing from the "Training Need Analysis" to design correctly the skill matrix. The "Five-S" and "ESG Goal" skill are new requirement in employees performance from top to down in all functions including the directors sitting in the board.
Strong ESG Practices Through Green Training & Performance Measurement:
Green training is an important arena where mind has not been used to conserve energy, reduce waste, and reuse the effective delivery of online training methods towards sustainable training practices for achieving the ESG Goal. The Performance Management is required to be aligned with the monetary or non-monetary compensation. The high rating of numerical "ESG Skill" in the employees performance card, is a strong green indicator towards the green goals, green targets and achieving the ESG Goal. To motivate employees, benefits like time off, paid vacations, gift, certificate, travel and tour can be rewarded for employees showing positive response towards achieving the ESG Goal.
So, to achieve the corporate ESG Goal, combined efforts of employees are required. This is only possible when the HR department owns the responsibility of achieving the ESG Goal. This is not the production department or the maintenance department job. This is also not the job of the marketing, finance or account department. A new function is seen as fashion of creating "CSR and Sustainability practices". Experience says, this is completely orphan department, if direct involvement of HR is not here. Further experience says, the major part of the sustainable practices, like abolition of child labor, gender protection, women's equality right on job, sustainable employment practices, bringing decent job practices and corruption free culture are all related with the HR intervention. Top Indian directors, sitting at the board and managers in the HR department think that the CSR and Sustainability are mere unnecessary expenditures and burden imposed by the government. This negative attitude beats the corporate ESG Goal. Such poor attitude also do not allow the company to remain in a civilized society.
Hence, HR is the ultimate department to handle the ESG and ensure that the employees achieve the ESG Goal as an individual and team, through performance measurement and disciplinary measures. If this target is not achieved then the responsible member from the board of directors handling ESG Goal shall be held accountable. This should must be in policy. If performance pressure is on the director, then it shall take necessary work from the stakeholders.
Other HR Practices:
There are other several HR practices which hit directly the ESG Goal. The HR Manager, if enforces HR intervention correctly it can generate green HR culture with huge ESG impact. Leave application is a huge paper work. This embodies larger rate of carbon emission. If this is paperless, it reduces carbon foot print. Similarly strong Industrial Relation culture also helps in reducing carbon foot print. Disturbed company with frequent "labor strike" and disturbances of smooth production, due to human resource and IR related problems are threat to larger rate of carbon emission. Deployment of manpower where three people are required to perform a job, are filled with ten people. This is widely seen in Indian companies, where poor 5S culture dominates. This is demonstrated that in a "Lean Culture" operation, where 5S culture is strongly implemented, 10 people job can be done by three people. The HR fails to give here exact "lean" manpower. Excess manpower, is "fat" and fatal for the business. It reduces employee engagement and increases useless employees movement at the work site. This poor culture shall not only generate high rate of carbon emission and wastage but shall kill the business also.
This is just beginning to understand the ESG in green HR practices.
( Birendra K Jha, is a Pan India Practitioner on the "Social Impact Assessment Audit"; "ESG Audit" & "Sustainable Practices". He is a Qualified & Certified Social Auditor from the Institute of Social Auditor of India (ISAI -ICAI). He is also certified professional on the ESG; Carbon Emission Accounting; Carbon Tax; Sustainable Practices & Environmental Law. Currently, he is Director of HR Lab, a Social Audit firm. He is based at Delhi-NCR. He overlooked at senior position as General Manager and Deputy General Manager in the previous South Korean MNC Company in India handling human resource, social audit, ESG and sustainable practices for more than a decade. He may be approached at: birendrajha03@yahoo.com )
Reference:
1.Douglas W.S. Renwick, Tom Redman, Stuart Maguire, 2012, Green Human Resource Management: A Review and Research Agenda, International Journal of Management Reviews.
2. Dr. Venkatesh J, Prof. Lissy T. A., Prof. Bhatt Vaishnavi, 2014, Sustainable Development and The Role of HRM: An Empirical Study of the IT Sector in India, International Journalof Innovative Research in Science, Engineering and Technology, 2014, 3(8),15495-15500.
3. Mandip Gill, (2012), Green HRM: People Management Commitment to Environmental Sustainability, Recent Journal of Recent Sciences, 1, 244-252
4.Brekke, Nybord (2008), Attracting responsible employees: Green production as labor market screening, Resource and Energy, http://citeseerx.ist.psu.edu/viewdoc/summary
5.Dechant, K., & Altman, B. (1994), Environmental leadership: from compliance to competitive advantage. Academy of Management Executive, 8(3), 7-27.
6.Jacob Cherian & Jolly Jacob, 2012, A Study of Green HR Practices and Its Effective Implementation in the Organization: A Review, International Journal of Business and Management, 7(21), 25-33.
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