Leaders are Responsible for Making a Positive Change
Dear CEOs, what really matters to your company?
According to Robin Nuttall, expert partner at McKinsey & Company, 70 percent of employees seek purpose at work. Employees find a sense of purpose when their work makes a positive difference that aligns with the company’s purpose. However, the purpose of your company should not only resonate with your team, but with society.
With sustainable investing becoming a mainstream strategy as younger generations advocate for social change, your company is now expected to have a greater purpose that benefits the broader society and fulfils ESG criteria.
First – What is ESG?
Environmental, social, and governance (ESG) factors are a set of criteria that is considered by stakeholders in their decision-making process.
How is your company perceived by ESG stakeholders?
Environmental – Does your company contribute any harm to the environment (e.g., excessive waste, pollution, carbon emission)? Is it making any efforts to minimise its damage to the environment?
Social – How does your company impact society both internally and externally? Are you providing fair wages to your employees? Is your company benefiting the greater community?
Governance – How is your company led? Do your company policies make a positive difference?
The Importance of ESG in 2022
It is important now more than ever for companies to raise their game in sustainability efforts. Not only have many countries including Malaysia introduced mandates for companies to provide ESG reports, but more people are growing concerned about social issues like climate change, inequality, and data security.
Hence, stakeholders feel a sense of responsibility in their investment and spending decisions, which is why there is a huge interest for ESG reports. Particularly from millennials, who believe that their investment and spending decisions can result in social change. Millennials and Gen Z alike push for positive social impact, which makes it even more important for companies to fulfil ESG criteria as the younger generations start becoming primary stakeholders.
Why is the younger generation today significantly more interested in ESG than previous generations? Simply put, millennials and Gen Z have more resources. Not only do they have more buying power, but they also have easier access to learn about social issues through social media. It gives them a global perspective and shapes their mindset towards them.
The younger generation is more aware of the serious threats posed by social issues. Although they are committed to make a change on an individual level, they believe that social issues stem from problems within the structures and policies of organisations.
For millennials and Gen Z especially, inequality is a major systemic issue. A huge percentage of younger workers would leave their jobs for a better workplace experience. Many of them feel discriminated against by the government and businesses, including their own workplace.
Alongside inequality, climate change is a huge concern because of its prominent and lasting effects on the community. In recent years, the younger generation has become concerned about the working conditions and environmental impacts of fast fashion. While they try to minimise personal consumption of fast-fashion brands, they acknowledge that it doesn’t make much of an impact besides reducing their own carbon footprint. Thus, they intend to hold leaders accountable for making a significant change for the improvement of the community’s well-being.
Improve Your ESG Performance
ESG stakeholders want to enter into relationships with organisations that will make a positive social impact.
So, how can you appeal your company to ESG stakeholders?
Establish your company’s greater purpose. Your company’s purpose needs to be more than just creating a successful business. It needs to be about being the positive change society needs.
Your company should strive for success, but what’s more meaningful to your employees and customers is what you do with that success. In a recent study, employees who received bonuses in the form of donations to charity reported higher job satisfaction than employees who did not. Making a positive social impact leads to happier employees. At the same time, reporting such donations shows stakeholders your company’s efforts to contribute to positive social change. Therefore, fulfilling the ‘social’ criteria that ESG stakeholders are looking for.
If your company is looking to make a change in an impactful way, consider signing up and being part of the Malaysia Leadership Summit 2022. The Summit, part of the Asian Leadership Series, is sponsored by Malayan Banking Berhad and SP Setia Berhad and organised by Leaderonomics in partnership with Together We Can Change The World, a non-profit organisation dedicated to improving the well-being of women and children in Southeast Asia.
The Summit, themed ‘The Future of Work: Innovation, Influence, Inspire’, is about inspiring and empowering leaders across organisations to make a difference. Global leaders will share their insights on how to activate and grow your leadership.
All proceeds obtained from the ticket sales of the Summit will be given to community initiatives, NGOs, and social causes in Southeast Asia. You will not only help your employees grow and develop their leadership skills but also make a huge difference to communities.
There is a strong demand for companies to act on social issues particularly by the younger generation. By 2025, millennials and Gen Z who are invested in ESG initiatives will comprise most of the workforce. Ensuring your company is driven by community values is of utmost importance. Failing to address them will put your company at a huge risk.
When was the last time you checked if the purpose of your company is aligned with that of your community? Is your company dedicated to empowering the future that enriches life for all? It’s not too late to act! Sign up for the Summit here.
Check out this recap of the Malaysia Leadership Summit 2019:
Elya is a strong-willed individual who is dedicated to empowering others. She values creative expression and developing genuine connections with people. Through her interests, she aspires to help people in one way or another. She is currently undergoing an internship with the editorial team at Leaderonomics while pursuing a degree in Psychology.
By Michelle Gibbibgs. How much space in the news is devoted to the negative and positive news? How we interpret the news or what is happening depends on our perspective. Read here Michelle's take on perspective.