• English
  • Français
Share

What if HR reports to Sustainability?

05/01/2023

The topic of sustainable transformation in companies has become a TOP priority for companies’ stakeholders. In parallel, a slow revolution has taken place. Companies have refocused on their core business. They outsourced a large part of their operations and the share of service providers have increased by double digits in all industries in Europe and the US since the last 20 years. From now on, companies operate as a network, managing purchasing, production and distribution in project mode. In the computation of added value, certain subcontractors, service providers or partners have become strategic. Losing one of them can have more impact than losing a few good employees.

Despite this new context, traditional HR is still too often focus on employees, those who have an employment contract. As a result, everything external escapes the HR department. However, HR itself has contributed to reducing its own scope by outsourcing payroll, accounting, IT and many other services. It is now the purchasing department, with operational managers, that hand over in the relationship with third-party employees, with all that this implies.  To help them in their environmental and social achievements, organisations are even offering them specific labels and tools, such as Ecovadis, to help them comply and demonstrate their sustainable alignment.

It then becomes easy for HR, with a considerably reduced scope, to display a bright scorecard on social issues, but this is only an illusion. In terms of the company’s social obligations, sustainable development encompasses three major concepts: the Environment, Social issues and Governance. Companies are also increasingly required to report on these areas under the European Sustainability Reporting Standards (ESRS).

The sustainable development department must therefore encompass industrial, purchasing, general secretarial, ethical and compliance issues. As far as social issues are concerned, only some of the information it needs comes from internal sources and the company’s employees.

Without further innovation on their part, HR will position itself as an internal service provider in the areas of employee engagement, internal communication and training, with challenges and risks that are likely to be well beyond its remit.

What can be done to maintain a strategic vision of human resources?

To justify their role on the strategy committee?

Sustainable transformation is having an impact on all departments, and the challenges for the HR function are exciting if it knows how to address them.

read more : HR and sustainability: Are we ready to lead the charge? | HRM Asia : HRM Asia

The Sustainable Workforce or the Death of HR? – The Human Well