MANAGEMENT & SUSTAINABILITY
The Role of Human Capital in Sustainability
Students of business, faculty and professionals have all heard the often repeated notion that “employees are the most important asset” of an enterprise. However, actually investing in and developing people and human capital is rarely done effectively. For an organization to engage fully with sustainability, a human capital strategy is critical. Indeed, employees must have the skills, tools and feel supported and well-informed to carry out sustainability objectives in their areas of responsibility.
According to Harvard Business Review, human capital management refers to a set of people-oriented capabilities including inclusive leadership practices, employee engagement, knowledge sharing, workforce optimization and learning capacity which together drive organizational performance.
Sustainability is not just about investing in the right technologies or developing the right strategies; it’s about creating an organizational culture able to respond to grand social and ecological challenges.
Integrating Sustainability Into Human Capital Management
Effectively integrating sustainability into core strategy and business functions requires a new kind of talent, training, compensation, and performance management programs. Human capital and human resource professionals are uniquely positioned to help embed sustainability in organizational culture.
Here are four ways they can do it according to the special report HRM’s Role in Corporate Social and Environmental Responsibility from the Society for Human Resource Management (SHRM).
Employee Attraction and Selection
Research reported by Forbes suggests younger generations put a high premium on jobs at purpose-driven companies, are more engaged at such companies and are even willing to work for less pay if they trust they will have an impact.
Human capital and human resources professionals can play a unique role in ensuring impact as at the core of the recruiting process. This comes with a warning however: make it genuine. Millenials are Gen Z are highly skeptical of impact claims.
Case example: HR and recruiting for sustainability
Employee Training, Development and Compensation
Younger generations have grown up with opportunities to learn about the social and environmental issues that are important to them. They will continue to look for such opportunities at their employers.
Engaging fully with sustainability requires effective and regular training and professional development opportunities for employees. Unilever and PWC, for example, will send managers to live in developing countries so they have greater understanding and empathy for customers in those marginalized contexts.
Case example: Starbuck’s Greener Apron Program
Creating a Sustainability-Focused Culture
Sustainability requires cultural change. The “holy grail” of organizational change is embedding a new system, technology or mindset into the culture such that it becomes permanent. This is not easy. It requires a constant, concerted effort over time.
Sustainability faces unique challenges since it can be complex and can be regarded as only a priority of executives–not lower-level employees. Human resource teams help through programs that reward and support employees like subsidizing public transportation, wellness programs, and paid volunteer time.
Case example: WalMart’s Personal Sustainability Projects campaign
Management Support and Communication
Sustainability must figure prominently in management communications and investment decisions. Employees watch carefully what leaders say and do.
Human resources can support upper level management in using their communications to support and reinforce a commitment to sustainability.
Interface’s late CEO Ray Anderson famously spent years speaking directly with employees about “Mission Zero” and his vision to become the world’s first regenerative company. Even after his passing, the culture transformed by his constant communication and investments in sustainability, continues as strong as ever.
Case example: Ray Anderson, founding CEO of Interface and “Mission Zero” (links to TEDTalk)
Learn about more sustainability concepts within this major.
ADVANCE YOUR KNOWLEDGE OF MANAGEMENT AND SUSTAINABILITY
Learn what sustainable management is all about and its importance
Learn the important things to know in this field
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