Leading publication

JAMES SPENCERDirectorPricewaterhouseCoopers

S60Sustainability: Workplace

www.pwc.co.nz

PwC

Business as usual or unusual?

• Three “rules” to consider

1. Employee engagement drives business performance

2. Sustainability drives employee engagement

3. There is no silver bullet for embedding sustainability

• Two objectives for today

1. The case for change

◦ Why does sustainability matter from an employee’s perspective?

2. A framework for embedding change

◦ How can we embed sustainability into business as usual?

3

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Some numbers….

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1 Engaging employees through corporate responsibility, Ipsos MORI Employee Relationship Management, Nov 20062 PwC Managing Tomorrows People December 2008: pwc.com/managingpeople 20203 Driving Performance and Retention Through Employee Engagement, (2004), Corporate Leadership Council4 PwC 12th Annual CEO survey 2009: pwc.com/ceosurvey

of employees would recommend their company if they feel it is environmentally responsible v fewer than 50% if it is not 1

of ‘millennials’ would consider leaving an employer whose corporate responsibility behaviour no longer meets their expectations 2

of employees who consider their employers to be paying enough attention to environmental protection and sustainable development exhibit high levels of commitment 1

Employees most committed to their employer perform 20% better and are 87% less likely to leave the organisation 3

of CEOs recognise their organisations’ responsibility to create management structures that reward long-term thinking as a critical or important element of a solution to climate change 4

75%

86%

75%

87%74%

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So, does it matter if employees are engaged with your sustainability strategy?

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What is on the mind of CEO’s?

Why

62% of CEOs agreed that climate change initiatives, would above all other benefits, provide a reputational advantage with key stakeholders including

employees1

75% of highly engaged employees believe they can impact cost, quality and customer service,

verses 25% of disengaged employees.3

More engaged colleagues

More engaged customers

74% of the public agree that they would believe the word of an

employee over that of a company advert regarding a company's contribution to society and the

environment.2

Essentially, engaged employees provide better customer service which translates to increased financial performance because they understand how their work can help the company achieve its’ strategy and objectives and their loyalty to the company motivates them to release discretionary effort.

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And as the “War for Talent” starts again….

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Three key messages…

1. Sustainability is no different from any other business change initiative

2. Embedding sustainability into the business is no different from embedding any other change into a business

3. Sustainability is a journey, not a destination

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HR plays an important role in embedding sustainability

• Not the sole accountability of an CSR Manager

• HR “owns” employee engagement. Sustainability, CSR, whatever you call it is a key driver of engagement.

CSR – HR = PR

- If employees are not engaged, CSR / Sustainability becomes an exercise in public relations.

- The credibility of an organisation will become damaged when it becomes evident that a company is not ‘walking the talk’.”

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A framework for embedding sustainability

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Leadership Who are the sustainability

champions? How do leaders role model

behaviour?

CultureHow are your business values

/ culture linked to sustainability?

Change Strategy How is sustainability linked

to the Business or People strategies?

People PerformanceHow is sustainability

measured?

Change Vision What is your vision for

sustainability?

Organisation Design: How is sustainability

embedded into jobs?

Benefits How are your sustainability

actions linked

Commitment How do you communicate your

sustainability initiatives?

Deliver Business Benefits

Develop culture

Define changestrategy

Build

comm

itmentC

reat

e ch

ange

visi

on

Design organisation

Man

age

peop

le

per

form

ance

Develop

Leadership

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Adapting it to embed sustainability

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Deliver Busines

s Benefits

Develop culture

Define changestrategy

Build

comm

itmentCre

ate

chan

gevi

sion

Design organisation

Man

age

peop

le

per

form

ance

Develop

Leadership

• Share the broader context – from both a business and personal perspective (answer

the question, “what’s in it for me?”) • Begin with some company mandates (set all

printers to double-sided printing, adjust thermostats)

• Provide examples of how one employee can make a real difference (removing a single

light bulb from every vending machine at all Walmart locations saved $1 million)

• Leverage the diversity of your company – allow for different ways to engage in sustainability initiatives (recycling, volunteering, leading a team)

• Communicate early and often and in different formats (signs, newsletters, conference calls, meetings, pod-casts, tweets)

• Make sustainability part of every employee’s job description

• Develop metrics by company, by department, and by individual and report out progress (track effect of recycling program – reduction in waste, reduction in trash removal)

•Pr

ovid

e op

port

unity

for em

ploy

ees

to

gene

rate

idea

s (g

reen

team

s)

•Pr

ovid

e a

form

at fo

r sh

arin

g id

eas

acro

ss d

epar

tmen

ts a

nd lo

catio

ns

(intr

anet

, ele

ctro

nic

new

slet

ters

)

•St

art w

ith in

itiat

ives

that

eve

ryon

e ca

n

part

icip

ate

in (e

stab

lish

recy

clin

g pr

ogra

ms,

rem

ove

all s

tyro

foam

pro

duct

s fr

om c

afet

eria

)

•Dev

elop

ong

oing

trai

ning

pro

gram

s (v

ideo

s,

podc

asts

, lun

ch &

lear

ns)

•Tie variable com

pensation to

progress on sustainability

initiatives (in manufacturing plant,

part of manager’s bonus is tied to

drop in energy usage)

•Sponsor com

petitions (most ideas,

most cost savings, greatest effect

on comm

unity)

•Link E

xecutive / Managem

ent

remuneration to

sustainability targets

•Create a vision of sustainability

for your company (what does

sustainability look like?)

•Dem

onstrate c-suite support (what steps

will managem

ent take?)

•Explain why sustainability is im

portant to

your business in particular (what benefits

will be gained? Cost-savings, improved

image in the com

munity, etc)

•Id

entify

and

allo

cate

res

ourc

es

(bud

get tim

e an

d m

oney

)

•Pu

t in

fras

truc

ture

in p

lace

to

gene

rate

idea

s

•Id

entify

wha

t yo

u ar

e cu

rren

tly

doin

g w

ell a

nd w

hy

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Example: Embedding sustainability into the workplace - PwC UK

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Issue: Staff were making changes at home to reduce their environmental impact but were not carrying these behaviours into the workplace

Challenge: How could we link the employee engagement agenda to the firm’s targets around reducing carbon and working in our communities

Solution: Introduced sustainability + schools programme.

- Focus on adopting sustainable behaviours (reducing energy and resource use, reusing materials, recycling waste).

- Measure savings and contribute to trust fund for local schools (used to teach children how to lead more sustainable lives and their impact on the planet)

Result: Significant financial savings and increase in employment engagement survey scores

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$

$Business

$

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Some questions to consider…

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Consider this...

How do you know if your employees believe they work for an organisation that acts responsibly towards society and the environment?

How are your leaders visibly and proactively demonstrating their commitment to sustainability?

How are you encouraging behaviour change around sustainability?

How do your reward programmes support your sustainability objectives?

How do you measure the impact of your sustainability programme on your people’s motivation and commitment levels? Or on the success of your recruitment and retention activities?

Employee Engagement

Su

stain

ab

ilit

y

Compliance Strategic

High

Low

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Drives employee emotional commitment via organisational levers

Increases employee discretionary effort, ie going the extra mile for the company

Increases customer satisfaction and customer loyalty

Improves revenue growth and profitability

Sustainability Programme

Linking it all together…

…the Sustainability value chain

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