How the Future of ESG is Shaping the Workplace

Environmental, social, and governance (ESG) factors have shaped investment strategies and workplace priorities for decades. As more businesses and consumers realize the importance of ESG, we get a better idea of how the future of ESG will shape the workplace.

ESG is not a passing trend. From 2006 to 2020, the number of companies that pledged to integrate ESG principles into their investment decisions grew from 63 to 3,038.

Read on to explore the impact ESG has had on the workplace and what effects we might see in the future.

Key Takeaways

  • ESG factors are becoming increasingly important for businesses that want to reduce costs, hire new talent, and improve investment prospects.
  • Updating the physical office space is seen as a major component of an ESG-friendly workplace. Companies will need to integrate the outdoors and the community.
  • One of the biggest benefits to pursuing ESG goals in the workplace is the effects on employees. Employees at companies with higher ESG scores tend to be more satisfied and productive.

How Important Is ESG?

ESG factors are a way for businesses to promote positive changes focused on sustainability and consciousness. It was originally used to score businesses for investment purposes. ESG considerations can also be called impact investing, socially responsible investing (SRI), and sustainable investing.

Today, ESG factors extend beyond investment strategies. Many consumers consider these principles before doing business with a brand and many employees prefer working at companies with strong ESG goals.

Today, companies with a strong commitment to ESG improvements, tend to be more successful than those without. By promoting ESG principles, companies may see the following benefits:

  • Reduced costs
  • Access to new opportunities
  • More governmental support
  • More productive employees
  • Increased investment

The Effects of ESG on the Workplace

ESG factors have a considerable effect on the workplace. The push towards more environmentally friendly practices reduces waste at work. More socially conscious policies promote a healthier work environment and improved business governance delivers transparency and more diversity.

Here are some of the anticipated effects of ESG on the workplace of the future.

1. Changes in Physical Office Spaces 

Many workers were suddenly forced to work from home in 2020. In 2022, many of those workers still have not returned to the office. This has forced many companies to reexamine their need for physical office space. Yet, companies can also examine physical office space through an ESG lens for a new perspective.

Research from the architecture firm Gensler found four driving factors for the future of office space:

  • Focus on human connection: In-person interaction is an important factor in promoting creativity, innovation, and culture. Modern offices should contribute to that real-life connection by providing spaces where employees can collaborate freely and have meaningful encounters.
  • Anchors in the community: Corporations are no longer faceless enterprises. They must be actively involved in their communities. New office spaces should reflect that community commitment by easily transforming ground-level spaces from daytime offices to evening community centers. For example, a corporate kitchen could transition into a community restaurant.
  • Connection to nature: One of the positive benefits of the pandemic was people spent more time outdoors. We have rekindled our love of nature. Many work-from-home employees were able to work in parks and other outdoor spaces. A new ESG-focused workspace must offer workers connections to nature. This could be done with outdoor balconies, rooftop gardens, or ground floor levels that open to green space. 
  • Investment opportunities: A building designed with ESG factors in mind creates ideal investment opportunities for developers who share those same principles.

Using these ideas, designers created a digital mock-up for an office space concept in Baltimore, called The Morphable Office.

An office designed using ESG principles could look like this Morphable Office.

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2. Employee Satisfaction 

The Social aspect of ESG applies to both the public community and a company’s workforce. It has long been proven that satisfied employees are better workers – they work harder, are more loyal to their employers, and produce better results. 

Making these positive employee effects even more significant is a recent study from MarshMcLennan. This study found that employees are about 14% happier working for companies with higher ESG scores than the global average of other companies. The most significant ESG factor on employee satisfaction was a company’s Environmental score.

Employee satisfaction is better at companies with higher ESG scores.

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3. Employee Activism 

As corporate priorities shift towards purpose over profit, many employees are using their positions to influence change. This employee activism can be seen in businesses around the world. In a recent survey, employers identified environmental and sustainability issues as the biggest potential risk to their corporate reputations. Hiring executives have reported that potential employees ask about companies’ political values and diversity principles during the interview process.

Businesses also need to make sure they are following through with their stated ESG goals and marketing claims. When their actions do not match what they claim they are doing, there is a much higher risk of public and employee activism.

This video explores the effects of activism on ESG factors and why it is important for businesses to follow through.

4. More Diverse Workforce

Younger generations want to work for companies that share the same values as they do. They want to see a strong sense of purpose from their prospective employers. With this in mind, businesses will need to promote their ESG goals and adjust their hiring practices to consider a more diverse workforce than they would have before.

Another recent development in U.S. employment is more businesses hiring ex-felons. Due to nationwide labor shortages, this previously shunned population is finding more opportunities for employment. Giving this group a second chance at life can greatly improve the outlook of their life. This “second chance hiring” not only fills empty job openings, but it can diversify the workforce and improve the Social aspect of a company’s ESG goals.

Promote the Future of ESG with a Televerde Partnership

If your business is looking for ways to improve your ESG outlook, working with Televerde may be the ideal solution. Televerde is committed to working with purpose-driven companies and considers employees from all walks of life, regardless of their circumstances or background.

At Televerde, we specialize in helping businesses with expert marketing, sales, and customer support. We offer outsourced customer care centers designed around second chance hiring principles.

Want to start making a difference in your community? Contact Televerde today to learn about our customer lifestyle solutions.

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