2023 trends (and beyond) for ESG focused employers

Global ESG assets are expected to surpass USD50 trillion in just 2 years.¹ That’s a 178% growth from 2021’s USD18 trillion.² These numbers show a clear indicator: ESG is becoming the most important way of operating for the world’s most influential companies.

Nicknamed the ‘ESG gold rush’, this increased focus (and investment) in environmental, social and governmental activities is a response to the increasing pace of climate change and the pressure from investors to show ethical credentials. Customers and employees are also aligning their values, with 61% of the latter saying that an organisation's commitment to sustainability would be a factor in deciding to work for them.³

Though the evidence is clear, the work needed to achieve these sustainability goals is still in its early stages. For companies working with an existing ESG framework, knowing where to invest finances and resources to capture this wave is tricky. Corporations must balance current needs with future projections while tuning into only the right information sources.

Here we look at how the growth of ESG will change both the employee and employer experience.

The increased commitment to ESG operating models comes with the increased need for people with the skills to lead the change. For example, in 2022, advertisements for ESG roles increased by 46%⁴, but 20,000 of those positions remained unfulfilled in APAC as the year closed out.⁵ For employers, this creates a pinch point where experienced leaders are needed for an emerging practice, and those with the skills are rightfully charging a premium.

This fundamental shift in the workforce will likely speed up operational digitisation for enterprise-sized companies. Their ongoing move away from process-heavy, manual tasks in favour of automated and IoT solutions will transform these legacy monoliths into ESG leaders in the coming years.

Employees too will need to upskill to match this pace of change and maintain relevance, with AI, digital and data literacy likely to be the key requirements. Undoubtedly this change will be welcomed as the simple, precise and repetitive tasks that sink hours of employee time will become automated processes. This will free employees to focus on higher-value and more complex tasks.

For organisations with global operations, 2023 begins in a challenging climate. Interest rates are rising, material costs are increasing, and employment levels are still recovering from the shutdowns of COVID-19. For developing markets this is particularly challenging with the predicted global recession looking to hit those regions the hardest. Combine this with the vulnerability of these regions to climate change and the challenges begin to look insurmountable.

But the outlook is hopeful. The transition to a hybrid, digital workforce has meant that the people impacted by these challenges can continue to work and seek employment outside their home countries. For companies with a developed social commitment, or the ‘S’ in ESG, this helps achieve an ethical supply chain and shows a continued dedication to sustainable growth.

This offshore model also ensures operational continuity with a virtual workforce that is ready to be deployed when climate-impacted teams cannot work. Support a workforce dispersed across locations and time zones with conferencing technology and the offshore team becomes fully embedded in the local team.

As opportunities for employees to work in different locations increase, so will their potential to shift jobs to suit their lifestyles. For employers, this means providing an appealing package that attracts and retains the best talent.

Tools such as Unified Communications that connect local and international teams will be part of this package appeal. Allowing employees to connect seamlessly while eliminating the need for carbon-heavy travel is also one of the primary tenets of ESG and will get companies closer to reducing their impact on the environment.

Looking further into the future, Augmented Reality tools (AR) look set to further enhance communication. Connecting virtual teams using AR conferencing is predicted to become commonplace with globally distributed people sharing virtual space for collaboration, meetings and water-cooler chat. This will foster feelings of connection between virtual teams and create a greater likelihood of loyalty.

While we can’t be certain of what the future holds, we do know that technology will help achieve ESG goals and give us a competitive advantage in the face of uncertainty.

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References:

1. Bloomberg, 2022, ESG May Surpass $41 Trillion Assets in 2022, But Not Without Challenges

2. PWC, 2022, ESG-focused institutional investment seen soaring 84% to US$33.9 trillion in 2026, making up 21.5% of assets under management

3. Hays, 2022, Why businesses need to prove their sustainability credentials

4. Global Data, 2022, ESG-related job postings are steadily increasing as companies develop their sustainability initiatives

5. Michael Page, 2022, The rising demand for roles in ESG and sustainability