Here’s How ESG Scores Can Affect the Talent You Attract

Have you ever wondered what attracts candidates to your organization? What are some key, perhaps not-so-obvious elements that could cause a potential candidate to hit “apply” on your job posting? Your business’ ESG score or ESG rating could be one of those hidden factors. Studies show  that a company’s ESG score is one of the factors new generation of talents consider when job hunting.

What is an ESG score?

ESG scores are a way to measure a company’s environmental, social, and governance (ESG) practices. In essence, an ESG score highlights a business’ dedication to corporate responsibility.

Environmental practices refer to the company’s impact on the environment. Some examples include reducing your carbon footprint, climate change vulnerability, waste management, energy efficiency, biodiversity and land use, and energy practices.

Social impact speaks to how company policies and practices interact with the human element. These factors affect employees, customers, and other stakeholders, and include policies on diversity and inclusion initiatives, community engagement, product safety and quality, and labour practices.

Governance focuses on the company’s board structure, executive compensation, accounting practices, leadership, and transparency in decision making.

What are the benefits of a good ESG score?

ESG scores range on a scale from 0-100. A score between 0-49 is considered poor, 50-69 is considered good, and over 70 is excellent.

Attracting and retaining talented workers accounts for a major part of business success. When searching for new opportunities, candidates are no longer just concerned about the salary. Millennials and GenZ especially, look for companies with good social responsibility and a high ESG score before submitting an application.

With the rise of remote work, unlimited PTO, and four-day work week, it has become increasingly difficult for employers to attract talent that will stay beyond a year. Candidates can be a lot more particular about the companies they choose to work for. Having a good ESG score gives you an edge that highlights you in a positive light to applicants.

Additional benefits to having a good ESG score includes:

Easier access to capital – Companies with higher ESG scores typically have fewer liabilities which makes them more attractive to banks and investors. This could lead to easier access to capital which allows them to hire top talent.

More positive reviews – Clients/customers and employees of businesses with a higher ESG rating typically leave more positive reviews on the business. Great reviews result in building a strong brand for your businesses, which can improve your business’ bottom line.

How can businesses improve their ESG score?

There are a few things businesses can do to improve their ESG score and make their business more attractive to candidates and investors.

1.      Develop a business code of ethics that encompasses compliance with the laws and regulations, highlights business integrity, workplace conduct, and training & awareness.

2.      Create and follow a workplace health and safety program. – Health and safety isn’t just important for your ESG rating, it is also necessary for remaining compliant under occupational health and safety legislation.

3.      Develop company policies and practices that fulfill your commitment to the environment to lower greenhouse emissions and overall contribution to reducing pollution for a greener earth.  

4.      Support worthy causes and charities that are meaningful to your business. Customers and job applicants are loyal to companies that support local charities that are in line with their brand.

Need expert HR assistance for your business?

Finding talented employees can be a challenge. Our HR advisors can help. We offer expert HR advice, HR policy support, and a smart HR software to help you grow your business company and meet your goals. Our certified advisors can also assist you with any health & safety and employee issues that may arise. Call 1(833) 247-3652 today to learn more about how our services can benefit your business.