Are You Sharing Your People Story? 

ESG is a hot topic, and while it’s in the news almost daily, the term is still often misunderstood. So let’s start by defining it. ESG stands for “Environmental, Social and Governance.” Investors use these three factors, along with traditional financial metrics, to measure investment decisions, and that’s why it’s critical to have a communications framework in place for sharing your company’s ESG information.  

ESG is not new. Companies have been publishing sustainability reports for years; according to the Governance & Accountability Institute (G&A), by 2020, 92% of S&P 500 companies had published an ESG or sustainability report. But the concept has evolved over the years, and now, some investors are narrowing their focus to one specific ESG factor: human capital management.   

Why? These investors are asking how corporations utilize, develop and care for their people because they understand that this can have a material impact on corporate performance.  

The ways in which companies manage their people and culture affect powerful metrics like attrition, performance, employee engagement, and diversity and inclusion. Showing how you spur feelings of belonging and appreciation within your employee base provides real business value, and the storytelling around it matters.  

That’s why some forward-thinking companies have started publishing annual human capital management reports as part of, or in addition to, their ESG reports. 

It should be no surprise that your employees — the people with the skills and knowledge to do the work — generate a large share of your company’s value. This shows up in the “intangible assets” column of a company’s balance sheet and is more noticeable today than ever. Just 32% of the market value of the S&P 500 was considered intangible in 1985. Fast forward to 2020, and that share grew to a whopping 90%

A well-thought-out Human Capital Management report is essentially a report dedicated to your people and your commitments to them. Don’t think of it as a “fluff piece.” Rather, it’s an opportunity for companies to share great results, be transparent about their gaps and hold themselves accountable to their goals.  

The pandemic accelerated the corporate focus on people and forced many companies to reconsider their management practices and policies. Pandemic-induced changes in work habits, along with evolving employee expectations, are directly linked to the ability to recruit and retain the right talent. So, how you empower your people with technology, care for their physical and mental health and drive a culture of inclusion will be at the center of investors’ radars for a long time to come. You need to find a way to share your goals and your successes in this arena.  

Every company has a story to tell about the people behind the business; you can start where you are today. We’ve helped numerous clients build meaningful ESG and human capital management reports, and we can help you do it, too. Our Spring Green motto is “a fresh approach to strategic communications, rooted in people.” If you’re struggling to get started, drop us a line today, and we’ll help you get there.  

by Nellie Betzen