Employees are calling corporate claims of ESG progress baloney in a new survey, and boards should take note.
Employees are calling corporate claims of ESG progress baloney in a new survey, and boards should take note.
Corporate Directors Face Grim Reality of Climate Change Efforts
Corporate directors often claim to seek unfiltered information about the companies they oversee. Some even make a special effort to visit company sites and chat with employees to gain firsthand insights into the organization’s execution strategies and the challenges faced by workers. However, a recent survey conducted by the Harris Poll and the Center for Sustainable Business at the University of Pittsburgh reveals a different reality that contradicts the selective information presented at board meetings. The survey, shared with ANBLE and outlined in MIT Sloan Management Review, paints a grim picture of how employees perceive their company’s efforts on climate change.
According to the survey, 43% of employees view the short-term focus, lack of investor interest, and apathetic leadership towards sustainability as major challenges within their company. In addition, only about one-third of workers claim that their companies have made significant strides towards achieving environmental goals. Most alarming is the finding that 40% of respondents resonate with the sentiment, “Our leaders don’t believe in sustainability.” These results suggest that business leaders either fail to prioritize climate-friendly goals, engage in mere lip service towards the environment, or poorly communicate with their employees. CB Bhattacharya, director of the University of Pittsburgh’s Center for Sustainable Business, emphasizes that employees see companies overly focused on profits and short-term gains.
While employees may be unable to influence the problem directly, corporate boards possess the power to hold management teams accountable and insist on better practices. Furthermore, boards should be motivated to do so, not only to avoid potential accusations of misleading consumers and investors but also due to the increasingly evident and dire consequences of climate change.
CB Bhattacharya highlights three main actions boards should take to address the issue effectively:
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Define the value created for society: Companies must articulate the social value they aim to create through Environmental, Social, and Governance (ESG) goals. Sustainability should be regarded as fundamental in this day and age, and failure to integrate it into the company’s identity is a disheartening prospect.
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Embed sustainability into corporate practices: Sustainability should become a core component of a company’s strategy, with the management team responsible for developing a climate strategy. However, the board plays a crucial role in creating the necessary capacity and motivation for the CEO and leadership team to follow through.
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Allocate resources for employee training: Boards oversee resource allocation and can prioritize environmental protection by providing the necessary training to spread awareness of the company’s sustainability goals and how to achieve them. Shifting the focus away from quarterly profits and pandering to the market can foster a more sustainable mindset.
Bhattacharya asserts that incorporating concern for the natural world into corporate practices is not an insurmountable task; it requires a mindset shift and concerted effort. The University of Pittsburgh’s Center for Sustainable Business plans to conduct this survey annually in partnership with the Harris Poll to track trends and progress.
Remote, Hybrid, and Productivity: Misleading Terminology
Brian Elliott, co-founder and executive leader of Future Forum, a Slack-backed think tank dedicated to studying the future of work, expresses his disdain for the terms ‘remote,’ ‘hybrid,’ and ‘productive.’ In an insightful column for Charter, Elliott argues that these terms lead to unnecessary conflicts and distract from genuinely improving work for both individuals and organizations.
Elliott believes that measuring office work solely in terms of productivity is misguided and detrimental to employee morale. Instead, he suggests focusing on real opportunities to make work better for people and organizations. By reconsidering conventional terminology and prioritizing holistic improvements, companies can create an environment that truly benefits employees and boosts overall organizational success.
Diversity Matters: Insights on Board Composition
Spencer Stuart’s recent report on diversity among new board members reveals significant findings. In 2023, 67% of incoming directors identified as members of underrepresented groups. Notably, diverse board composition has become a priority for nominating and governance committees. However, the report also indicates a concerning decline in the percentage of new directors who are Black, dropping from 26% in 2022 to 15% in 2023.
Diverse board composition is crucial for fostering inclusive decision-making and ensuring a variety of perspectives are represented. This report highlights the ongoing need for continued efforts to promote diversity in boardrooms.
The Governance Matters Podcast Explores AI Applications
In a recent episode of the Governance Matters podcast, Keir Gumbs, the Chief Legal Officer at Broadridge Financial Solutions, discusses the experimentation with Artificial Intelligence (AI) applications in the legal and governance fields. Gumbs describes how generative AI presents an opportunity for lawyers and governance professionals to accomplish more in less time. By utilizing AI, these professionals can streamline their workflows and enhance their overall effectiveness.
Women Approaching Parity in Corporate Leadership
According to projections from S&P Global Market Intelligence, women may achieve parity in corporate leadership roles by 2030. Although conservative estimates predict women holding 50% of top jobs by 2037, the greatest progress is expected on corporate boards rather than in C-suite positions. This positive trend towards gender equality in leadership positions is a noteworthy development highlighting the ongoing efforts to promote diversity and inclusivity in the corporate world.
Supporting Abortion Rights Impacts Job Advertisements
A detailed study utilizing data from careers site Indeed reveals that companies advocating for abortion rights experienced an 8% increase in job ad visits. Conversely, these companies saw an 8% decrease in positive reviews of senior management by male employees. This study highlights the complexities surrounding social issues in the workplace and the potential consequences of taking a stance on sensitive topics.
WeWork’s Board Undergoes Changes
Struggling coworking real estate firm WeWork faced significant board changes as three board members resigned due to disagreements over governance and strategic direction. The company replaced these departing members with four independent directors who specialize in bankruptcy proceedings. These changes reflect the ongoing efforts to restructure and stabilize WeWork’s board and steer the company towards a more successful future.
Court Dismisses Lawsuit Against Starbucks
A federal judge in Washington State dismissed a lawsuit brought against Starbucks by an “anti-woke” activist group claiming that the company’s commitment to hiring diverse employees violated antidiscrimination laws. The judge suggested that if the plaintiffs did not wish to invest in “woke” corporate America, they should seek alternative investment opportunities. This ruling emphasizes the importance of recognizing and promoting diversity in the corporate world.
Morale Crisis at Goldman Sachs
New York magazine sheds light on the morale crisis gripping Goldman Sachs. The article explores how CEO David Solomon’s communication style has been described as dehumanizing, impacting employee morale. Furthermore, the bank seems to have lost some of its former luster among its competitors, clients, and governments worldwide. This situation serves as a reminder of the significance of positive leadership and support within organizations to maintain a motivated workforce and ensure continued success.
As the corporate landscape evolves, it is crucial for boards to embrace sustainability, promote diversity, and foster positive work environments. By prioritizing these factors, companies can ensure their long-term success while addressing the pressing challenges of climate change and societal expectations.
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