Can An Acronym Transform the World?
The United Nations and a coalition of committed individuals and organizations certainly think so.
We live in a world of acronyms. Some are well known, such as ASAP. Others have emerged in the age of texting and Twitter. Think LOL. OMG. IMHO. And still others exist within specific spheres. The HR community is filled with them. Some of the most “famous” include FMLA, ERISA, COBRA. (I still scratch my head that an acronym which stands for the Consolidated Omnibus Budget Reconciliation Act of 1985 is used to refer to continuing health care coverage after leaving an employer.)
All these acronyms serve a purpose. But there’s one acronym whose purpose rises above all: SDG. As in Sustainable Development Goal, of which there are 17 put forth by the United Nations to “transform our world.”
Together, these goals form an agenda for worldwide action: a “universal call to action to end poverty, protect the planet and improve the lives and prospects of everyone, everywhere.”
What could be a more “Human” agenda than the SDGs?
In my initial emHrge™ blog post, I posed the question What’s ESG Got to Do With HR? while in my second blog post, Alphabet Soup for a Healthier Society, I dove into the soupy waters of a few acronyms and terms that are used when discussing the topic of business as a force for positive change. For the purposes of this post, I’m going to use the term “Sustainability” to refer to ways in which business can support a healthy environment, a healthy economy, and a healthy society. Using this term is not only simpler, it also aligns with the topic here: The United Nation’s Sustainable Development Goals (SDGs) and how HR organizations and their supplier partners can support these goals.
Many businesses have begun to map their approach to Sustainability to the UN SDGs. These maps are typically developed following a Materiality Assessment, a formal process by which an organization determines how important specific issues are to them, often using the SDGs as a guide. But on the maps I’ve seen developed, organizations barely scratch the surface of what this means in terms of their own employees.
Hence, I believe it’s time for HR organizations (if they haven't already) tackle their own “Materiality Assessment” of its HR/total rewards programs in the context of the relevant SDGs.
Which of the 17 SDGs can HR have a material positive impact on their specific community of employees and, if desired, within the broader communities in which they operate? It’s easier to answer that question if we restate it thusly: Which of the 17 SDGs aren’t directly relevant to HR?
In my general HR Materiality Assessment, there are only a handful of SDGs I would eliminate from focus, as shown below, leaving roughly two-thirds of the SDGs firmly within the purview of HR. I call these the people-forward SDGs. (Of course, the six other SDGs also have a very material impact on people, but the responsibility for addressing them (usually) doesn’t lie with HR.)
HR has historically played an important role in ensuring fair wages are paid, safe workplaces are maintained, and that their employees (and their families) have comprehensive health care coverage, to name just a few policies and programs that link to the SDGs.
The last several years have seen HR go further, implementing programs to improve the total health and wellbeing of those they serve and to work toward gender equality in hiring and pay practices, and these efforts continue: Our profession is not starting from scratch here.
Frequently, however, changes to HR policies, benefits and compensation programs, and hiring and career development practices, are driven by new laws or regulations, or competitive pressures. Priority setting for potential changes is typically driven by new requirements or the results of the latest benchmarking studies or the greatest cost drivers (see "healthcare"). I've not seen many instances in which these changes tie to the organization’s overall Sustainability roadmap.
Some months ago, I had the opportunity to speak one-on-one with the leader of ESG strategy for a major consumer products company. The timing of our discussion turned out to be fortuitous... for both of us. It turns out our meeting was immediately before the first-ever meeting between the leader of ESG and the company’s total rewards team after they'd been on the job for nearly two years. Going into the meeting, this key driver of the organization's Sustainability roadmap didn’t have a good grasp on either total rewards or what the outcome of the meeting could potentially be.
I share this not to cast aspersions: As is often the case in large organizations, initiatives often operate in silos. But by not focusing on the employee element within the context of Sustainability goals and objectives overlooks many opportunities to achieve great things both inside and outside of the organization.
Digging Materially Deeper
Sustainability teams have a great deal to consider, address, and then to communicate the results to its stakeholders. Thus, its ability to dig deep into the area of workforce sustainability is limited; at the same time, their domain expertise is likely to be limited. This is where HR can play a vital role in helping the organization fulfill its Sustainability objectives. Just as ESG leaders coordinate with other parts of the organization to tap into domain expertise – from facilities and procurement, to manufacturing, legal and DEI (which may be part of the HR organization) – broader HR and the total rewards team should be involved, too.
Using the Materiality Assessment approach, we can examine the extent to which our organization’s HR/total rewards & wellbeing programs, plans, and policies fulfil the people-centric SDGs? And are they delivering the desired results in an economically sustainable manner?
Expanding our lens, organizations increasingly are being challenged to examine and as needed address these same considerations among their suppliers. This is particularly true in the textile and fashion and consumer electronics industries, but all supply chains should be examined if an organization is to truly fulfill its sustainability commitments.
What might an HR Materiality Assessment reveal, and more importantly, how would the assessment guide an organization in fulfilling its commitment to the people-centric SDGs listed above? The ultimate answer, of course, will vary by organization, driven by myriad factors, including competitive pressures (both in terms of competing in the market and competing for talent), geographic practices (by country, state, etc.), and of course regulations.
But within these variabilities, there are some universal components, some of which I've listed here:
The People-Centric SDGs
1. No Poverty
2. Zero Hunger
3. Good Health & Well-Being
4. Quality Education
5. Gender Equality
8. Decent Work and Economic Growth
9. Industry Innovation and Infrastructure
10. Reduced Inequalities
11. Sustainable Cities and Communities
16. Peace, Justice and Strong Institutions
17. Partnership For The Goals
Representative polices and programs
Mind the Gap (between what you do within your company and what happens “out there”)
When I earlier referenced the importance of expanding an organization’s Sustainability objectives to encompass suppliers, what sprang to your mind: Did you envision the operations of offshore suppliers? It's true that, historically, challenges have been abundant in countries whose products have become vital to the U.S. (and other nations’) economies, and increasingly we’ve seen companies held accountable for the actions of these international suppliers.
But we need to remember that problems still exist here.
Ripping from the headlines… “One of the nation’s largest food safety sanitation services providers has paid $1.5 million in civil money penalties after the U.S. Department of Labor’s Wage and Hour Division found the company employed at least 102 children – from 13 to 17 years of age – in hazardous occupations and h
ad them working overnight shifts at 13 meat processing facilities in eight states.” (Source: U.S. Department of Labor, Wage and Hour Division.)
This provider serviced numerous food processing companies, including some that are household names; companies that have strong statements in support of human rights generally and against child labor specifically. To fulfill its Sustainability commitments, though, companies need to ensure their suppliers are upholding the same commitments. Otherwise companies can simply "outsource" many of their operations that pose sustainability challenges while measuring the impact (i.e., materiality assessment) of only their direct operations.
In the world of ESG, this is one way in which companies can be said to be guilty of "green-washing." Sophisticated investors in particular don't appreciate green-washing as it under estimates a company's risk exposure.
Inspiration to Fuel our Shared Future
Of course, not employing child labor, and paying fair wages is a minimum standard. But the SDGs exist in part to inspire businesses to do more than the bare minimum.
The United Nations Global Compact bills itself as th
e world’s largest corporate sustainability initiative, and it calls upon businesses of all sizes (including those with less than 10 employees… like mine!) to sign on. It’s overarching belief is that “sustainability begins with a principles-based approach to doing business” so that businesses can help end “extreme poverty, fight inequality and injustice, and protect our planet.”
Launching emHrge consulting, and in the process unveiling our identity, was a long time in the making, rooted as it is in decades of HR and total rewards and wellbeing consulting. But it was also inspired by more recent formal and informal education of the Sustainability movement and understanding of the UN SDGs.
Our identity reflects that we – both as members of a vital profession and members of society at large – are emerging into a new age of the world of work: An epoch which requires us to put all of humanity at the center if we’re to tackle the toughest problems.
And while regulations, emerging trends, competitive benchmarks, and other factors will always inform how the HR profession goes about its day-to-day tasks, the UN SDGs can and should guide us in why we do what we do, and what the benefits will be for all our stakeholders as a result of our collective efforts.