ESG under the spotlight
The sustainability commitment.
In the evolving corporate world, ESG and sustainability are pivotal for long-term business success, influencing policy, investment, operations, and employee engagement. As the Middle East shifts away from fossil fuels, companies must adopt sustainable practices and improve transparency to boost market reputation and meet investor expectations.
Our survey, "Breaking through barriers: Sustainability in the Middle East 2024," reveals that 80% of business leaders have a formal sustainability strategy, with over half fully integrating it into their operations. This aligns with our CEO survey, where regional CEOs identified climate change as a key concern and driver for change.
ESG initiatives are now linked to corporate reputation, employee value, customer engagement, investment access, and operational efficiency, highlighting sustainability's broad impact on organisational success. With ESG-mandated assets set to reach $53 trillion by 2025, sustainability's role in global investment is undeniable.
Yet somewhat absent from employee priorities.
Despite being a primary focus for organisations, the critical questions remain.
Do the ESG related efforts resonate with the employees? Do employees value their organisation’s investments and initiatives? And how important are these initiatives when employees decide to join or stay with an organisation?
Employees focus on their company's sustainability practices only after ensuring their financial and personal wellbeing.
Fair and equitable pay has the greatest impact on employee retention.
According to the survey, 94% of respondents said they were likely or very likely to stay with their employers if fair and equitable salary increases were implemented. Similar percentage for respondents who were likely to stay if enhancements were made to societal or environmental practices is much lower (83% and 75% respectively). The PwC Middle East Workforce Hopes and Fears Survey 2024 reiterates this sentiment with 71% of respondents in the region looking to ask for a pay raise in the next 12 months.
Sustainability practices still a driver of employee engagement.
Despite the apparent disconnect, our survey data indicates that enhancing current ESG policies and practices can enhance employee retention.
Enhancing ESG policies increases employee retention, with 82% more likely to stay and only 3% unlikely when policies are enhanced. The improvements in ESG areas are valued by employees and can also shift the ‘fence sitters’ to a more favourable view of staying with their current employer.
Additionally, one key factor that can drive employees to be more conscious about ESG policies is to embed these principles into the organisational culture. This has been indicated in our survey, where among the factors that encourage employee retention, culture and values (94%) rate highly, closely following career and skills development (96%) and financial rewards (97%).
Building an ESG culture is far from easy, and as we reflected in our earlier publication, ‘Creating an institution fit for your ESG aspirations’, it is best achieved through setting a tone at the top, communicating the urgency and excitement, and leveraging peer to peer interactions, among other initiatives.
A personalised approach to engaging employees on ESG agenda
Appreciating ESG employee personas.
In today's dynamic corporate environment, it is imperative for organisations understand the need to embed sustainability practices across the employee lifecycle to ensure engagement at each stage and align employee priorities with the organisation's sustainability agenda. This is essential to cultivate a work environment where employees feel valued and connected to the organisation's mission.
When ESG elements are integrated throughout the employee lifecycle, such as employee onboarding and induction, learning and upskilling, performance management, career progression, employee recognition, rewards and benefits, and culture, it can create a more engaged and motivated workforce with better ESG outcomes for the organisation and society at large.
Our research indicates that there four distinct ESG employee personas based on their attitude towards ESG programmes, and relative tenure with the firm
Understanding these personas allows organisations to design and implement more targeted and effective ESG strategies that engage all employees, fostering a more sustainable and ethically conscious workplace.
Once an organisation has identified employee personas, it can recognise the 'moments that matter' – employee practices that create differentiated approaches - across the employee lifecycle for each persona.
A personalised approach to engaging employees on the ESG agenda receives better buy-in and creates the desired behaviours. By focusing on these moments that matter for their employees’ personas, organisations can transform their ESG strategies into dynamic elements of their operational and cultural fabric, driving not only environmental and social improvement but also enhancing employee engagement and corporate success.
People are at the centre of the ESG agenda. The engagement of the employees is critical to progress on the sustainability roadmap. ESG is an emotive topic and employees respond differently to it and engage at varying levels. Being perceptive of the employee sentiments and astutely designing personalised approaches to engage diverse employee groups can ensure that employees feel included and play their part in achieving the sustainability goals. It is in the interest of everyone that corporate leaders foster a culture where ESG is a core component of ways of working, and all employees feel enabled to make a positive contribution.
Khaled Bin Braik
Consulting Partner and Emiratisation Leader
ESG under the spotlight, yet absent from employee priorities.
Consulting Partner and Emiratisation Leader, PwC Middle East
Mayank Saxena
