Understanding Sustainability and the Role of HR

Last week, Stratostaff EA Limited had the privilege of hosting a webinar featuring Ms. Margaret Kariuki, the Head of Sustainability and Business Process Transformation at Sanlam Kenya. The webinar, titled "Understanding Sustainability and the Role of HR," provided valuable insights into how sustainability and ESG (Environmental, Social, and Governance) principles are integral to modern business practices. Here are some key takeaways from the webinar:

What is Sustainability and ESG?

Sustainability is about balancing the pursuit of profits with positive impacts on people and the planet. ESG stands for Environmental, Social, and Governance, which are the three pillars used in sustainability reporting. Each pillar addresses different aspects of a company's operations:

• Environmental: Focuses on the impact on the environment, such as climate change, biodiversity, and waste management.
• Social: Deals with the social impact on stakeholders, including human rights, labor management, and health and safety.
• Governance: Concerns how decisions are made within the company, including executive compensation, board diversity, and business ethics.

Importance of Sustainability in Business

Sustainability is crucial for long-term business success. It ensures that companies can continue to operate and grow without depleting natural resources or harming social structures. Embracing sustainability can lead to:

• Enhanced brand reputation.
• Improved risk management.
• Greater operational efficiency.
• Increased employee engagement and retention.

The Role of HR in Sustainability

HR plays a pivotal role in integrating ESG considerations into the business strategy. Here are some ways HR can contribute to sustainability:

Governance

• Board HR Committee (HRC): Establish committees to oversee sustainability initiatives.
• Board Diversity, Equity, and Inclusion (DEI): Promote diversity at the board level.
• Compensation Policy: Ensure equitable pay and implement anti-discrimination policies.
• Code of Ethics: Develop and enforce ethical guidelines.

Compliance with Laws and Regulations

• Adhere to labor laws, health and safety regulations, and prohibitions against child labor.
• Promote mental wellness and establish policies to prevent sexual harassment.

Social Impact

• Human Rights: Ensure respect for human rights across all operations.
• Equitable Pay and Gender Equality: Promote fair pay and opportunities for all genders.
• Employee Assistance Programs (EAPs): Offer mental wellness and counseling services.
• Sustainable Culture: Foster a workplace culture that values sustainability.

Environmental Impact

• Sustainability Initiatives: Participate in activities like tree planting, waste management, and reducing single-use plastics.
• Green Building Initiatives: Implement practices to reduce carbon emissions and enhance natural lighting and aeration for employee well-being.

Sustainability Reporting and Regulatory Landscape

Understanding the regulatory landscape is essential for compliance and effective reporting. Key regulations in Kenya include:

• CMA Code of Corporate Governance: Requires companies to implement formal sustainability policies and strategies.
• Nairobi Securities Exchange (NSE) ESG Disclosure Guidelines: Mandates disclosure of ESG-related topics.
• Climate Change (Amendment) Act: Focuses on reducing carbon footprints.
• Environmental Management and Coordination Amendment Act: Emphasizes the environmental impact of business operations.
• Sustainable Waste Management Act: Promotes responsible waste disposal.
• CBK Guidance on Climate-Related Risk Management: Guides the banking sector on climate-related risks.
• Human Rights Treaties: Uphold international human rights standards.

ESG Risks, Challenges, and Future Trends

Integrating ESG into business practices comes with its challenges, such as:

• Lack of understanding of ESG principles.
• Regulatory uncertainty.
• Greenwashing and short-termism.

However, the future holds promising trends:

• Increased regulatory push for mandatory ESG disclosures.
• Rising demand for sustainable products and finance.
• Growing stakeholder activism and ESG litigation.

Emerging Trends in HR

HR is evolving with the integration of sustainability, leading to new roles such as Chief Sustainability Officer and Chief Diversity, Equity, and Inclusion Officer. Green Human Resource Management (Green HRM) is gaining traction, emphasizing the role of employees in achieving environmental goals.

Sustainability is a continuous journey of improvement, integral to everything a business does. As HR professionals, embedding sustainability into our strategies and operations not only benefits the environment and society but also drives long-term business success. Let us champion sustainability initiatives and create a positive impact on our planet and people while pursuing economic growth.

Thank you,

William Mwangi