The core HR issue that affects ESG scoring is how the company engages with its employees from a personal and institutional perspective. Company management must have extensive knowledge about diversity and how to respond to it. However, as a business, companies must also look at the costs and benefits from a financial standpoint. Do the policies implemented have economic benefits? Basically, having good engagement with employees will evidently increase workers’ motivation, as part of the employee branding, and specifically minimize the risks that can arise because companies ignore inclusiveness in their HR policies.
Issues around flexibility and homework, mental health, and employee engagement during and after extended lockdown periods will require quick attention. These have put the HR agenda directly on the boardroom list of priorities and provide opportunities for HR leaders to lead recovery efforts. How the company does this in a way that instills resilience for long-term performance will be part of what stakeholders will look at when making their judgments under the ESG lens. Below are some HR-related issues that affect ESG scoring (in the Indonesian context). Even though there are regulations regarding employment that govern all of these matters, HR must be aware of the effects of globalization and information that spreads quickly. The HR scores in the ESG framework below are what greatly influence employee branding which will ultimately affect the company’s overall cost.
Diversity/Equality:
- Gender parity
- Age
- Disability
- Social mobility
- Neurodiversity
Mental Health and Well-Being:
- Employee happiness
- Absenteeism
- Sickness
- Menopause
- Hidden disabilities
HR Crises:
- Bullying/harassment
- Grievances/disciplinaries
- Employment litigation
- DSARs
- Whistleblowing
Employee Contract and Pay:
- Freelancer employment status
- Gender pay gap
- C-level pay
- Minimum wage
Recruitment and Retention:
- Multigenerational workforce management
- Aging population
- Talent war
- Automation/technology/AI
Work-Life Balance:
- Family-friendly/parental leave
- Career path
- Bereavement policy
