Should ESG matter when choosing an employer?
ESG is the buzzword of recent years: does it make a difference or is it simply marketing?
We’ve seen employer benefits trends come and go. At one point, it was extra health insurance benefits, then came diversity, spare vacation time, etc. We can all come up with such a list. Recently, we’ve witnessed many employers allowing employees to work remotely. One trend that’s been around for a while and has had staying power is ESG.
What is ESG?
ESG stands for Environmental, Social, Governance. It is meant to describe the management style of a company. And it’s a set of criteria that has existed since at least the 1960s when pension funds managed by trade unions chose to invest in socially-responsible companies.
Environmental is self-explanatory. The company shouldn’t be harmful to the environment, so it will probably have some sort of corporate climate policy in place.
Social is the company’s relationship with the community as a whole, and its community within, i.e. with its employees. It's worth noting, that being “good” socially includes a company’s desire to work with other ESG companies and partners.
Governance is the way the company is run: the management, the board, and the way that responsibilities are shared within it.
Who cares about ESG?
Many startups nowadays are focused on ESG and see shaping their policy around ESG as one of their fundamental goals. Market leaders such as Hilton, Walmart, Mastercard, and Boeing are also ESG.
As already mentioned, the criteria are in place to determine whether a fund should or should not invest in such a company. Therefore it makes sense for startups to at least try to look good while raising funds. But does the ESG criteria change anything for an employee?
Is it question of governance that reaps rewards for the companies themselves? Or is there something in it for employees as well?
For example, Amazon has been a company that has seen hyper-growth and many would want to work for the company. Yet, most would agree that Amazon does not fit ESG criteria.
If we not only look at Amazon's success story but also examine its practices as an employer, we see that it definitely has its problems. And that’s where the G from Governance becomes important. As potential employees, we should care how our future bosses will be making decisions.
We should also care about the S because Social also speaks of the company's social atmosphere within. Most of us will prefer the option to be able to interact with the company’s management and make an impact.
Finally, we could ignore the E and the environment, but we’ll all be living in it anyways and the sensible thing would be to at least try to care for it.
Should you choose an ESG employer?
We don’t always get to choose out of several employers and sometimes the right fit might not be an employer that fits ESG criteria. And that’s okay. But once you become a part of a company, you could potentially try and implement ESG principles at the company. You could try to do it with your colleagues and department and see the ESG spirit spread.
