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Why Is ESG So Important?

By Alberto Alesi - ManpowerGroup
General Director Mexico, Caribbean and Central America


By Alberto Alesi | General Director ManpowerGroup, Mexico, Caribbean an Central America - Mon, 03/28/2022 - 15:00

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Today, there is more focus than ever on environmental action, social impact and good governance (ESG). Investors, banks, potential clients and employees make decisions everyday that are more aligned to the success of companies on their ESG efforts. This is a worldwide trend. The way a company is involved in addressing these areas helps to evaluate corporate behavior in areas of sustainability, social responsibility and corporate governance. 

The whole world has many problems that cannot be tackled just by governments or one actor from society. That is why companies should believe in partnerships to build the future. The business model of companies must be focused on people, the planet, prosperity, and the principles of governance to create shared value for all and to contribute to our communities. Two in three organizations report ESG as a crucial focus for their organization. In addition, six in 10 companies are tying ESG goals to their wider organizational purpose (ManpowerGroup; 2022).

Businesses are becoming the most trusted actors, above government and media (Edelman; 2021), particularly emerging after the pandemic crisis. To focus your company on its contributions to society at large, the UN’s sustainable development goals are a framework to design the strategy. For example, some issues are climate action, responsible consumption and production, gender equality, reduced inequalities and promoting quality education, decent work and economic growth.

For example, regarding the planet, companies are turning to renewable energy, energy efficiency, greening supply chains, minimizing business travel, ecological packaging and recycling initiatives, among others. Two-thirds of employees want to work for companies that demonstrate ownership of the “E” in ESG (ManpowerGroup; 2022). On the other hand, related to social impact, an agenda focused on promoting a culture of diversity, equity, and inclusion is a must for enterprises to innovate, solve talent shortages and create opportunities for a decent job not only for a few, but for everybody. Over 30 percent of enterprises already deploy a strategy of D&I training programs (ManpowerGroup; 2022). To keep a position of trust, businesses should embrace transparency and accountability, showing that ESG is a real commitment attached to measurable goals that can be publicly shared.

Companies that align their purpose and their team values will have a win-win relationship. Six in 10 employees choose their employer based on beliefs, including controversial issues (ManpowerGroup 2022). Not expressing a position might be a reason to leave a company. Leaders should focus on turning ESG into action by setting goals for themselves and building a culture around it. In this way, every part of the team will be inspired and committed to achieve the goals. Leading by example is the best choice, as we know seven in 10 workers prefer having leaders they can trust and follow (ManpowerGroup; 2022).

I do believe ESG is the answer to building together the opportunities for future generations. Depending on the sector of each enterprise, the impact on the planet or society might be stronger in one or another. But what we need to be clear about is that a new kind of awareness should awaken in us and in our teams to build a sustainable future for our communities. We need leaders who are capable of inspiring others to follow a path of social responsibility, promoting values, empathy and caring for others while remaining trustworthy. There is no way back. If we learned something from COVID-19, it’s the importance of our people, and keeping them safe and sound in the first place. ESG is not just fair; it is a matter of business and a tool to create a culture of respect within a company for the planet, its resources, and its people.

It is time to rethink how we do business and become part of the change, and not the problem. Every action takes us to a promising future that does not compromise the well-being of future generations.

Photo by:   Alberto Alesi

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