ESG & Sustainability

For a sustainable future, you must change for good

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To become a sustainable business, you need to do things differently

The world has changed. Your people want to be part of something worthwhile, get behind something they believe in. Your customers and investors expect you to behave ethically in how you treat people and the planet. It’s not enough to turn a profit. You must make a difference.

If you want to deliver on the promise of your ESG (Environmental, Social and Governance) and sustainability strategy, then change is not just inevitable; it’s vital. And for truly successful ESG and sustainability transformation, you need to define your purpose, then develop the skills, talent, leaders and culture you need to achieve it.

People make that happen. They are the catalyst for changing your organization for good. For our society, for our planet and the prosperity of all.

It all starts with five questions. We can help you answer them.

How we can help

We’ll work with you, not only to shape your ESG and sustainability strategy but to develop and articulate an action plan that organizes and activates your people to deliver on your ESG objectives.

We'll help you:

Build board capability and ESG governance mechanisms

Becoming ESG-enabled starts at the top with the board having the right capabilities and governance mechanisms to oversee, enable and support ESG.

We draw on our proven approach to Board Effectiveness to help you:

Build board capability:

  • Educate your board members on key ESG issues
  • Align your board around your ESG priorities and define their purpose
  • Ensure that you have the right board composition and structure – achieving a strategic balance of relevant backgrounds, skills and experiences
  • Build the right culture, team dynamics and relationships within the board as well as processes and team norms to ensure they are as effective as possible

Put in place governance mechanisms:

  • Assign responsibility and accountability for ESG to the board and management
  • Put in place the right progress checks, monitoring and disclosure of accomplishments and milestones

Set ESG goals and reinforce them through executive compensation

What gets measured, gets done. Setting the right goals and putting in place the appropriate reinforcement mechanisms will be critical to delivering on your ESG goals.

We’ll work with you to honestly assess the importance of the ESG strategy to the organization and articulate what you intend to accomplish and by when. We’ll identify who will be responsible and held accountable for success. We’ll partner with you to put in place short- and long-term executive goals and we’ll restructure or rebalance your executive annual and long-term incentives to include ESG objectives.

Empower sustainable leaders at the senior level to drive ESG strategy

Senior leaders are responsible for developing, communicating, and executing ESG & Sustainability strategy. Their words and everyday actions are critical to infusing purpose and ESG objectives into the organization’s culture.

For senior leaders to do this well, they need to have an Enterprise Leader mindset. Enterprise leaders can run the business while changing the business. They lead across the enterprise and ecosystem to create value for a broad range of stakeholders.

Korn Ferry has developed a researched and proven profile of an Enterprise Leader which identifies the capabilities and mindsets needed to succeed. Drawing on our strong Executive Search expertise and deep leadership assessment and development capabilities we can help you find external candidates with the right profile, while simultaneously developing Enterprise Leadership capabilities in your existing leaders.

Embed ESG commitments into your operating model and structure

Many organizations will need to make changes to their operating model and organization structure to deliver on their ESG and sustainability goals. Given the need for leaders to exert influence across the ecosystem, it is likely that organizational structures will become flatter and more interconnected. Employees will need to collaborate in different ways and perform more complex work which means roles, job descriptions and career paths will inevitably change.

Backed by our deep understanding of work and people and enabled by our benchmarking data and AI tools, we’ll help you develop the operating model, structures and roles to support your ESG and broader business strategies as well as your purpose and the capabilities and culture required to deliver.

Acquire and develop talent for a sustainable future

Fulfilling your ESG ambitions is only possible with the right people. And a new operating model will mean new ways of working, new roles and new skills. 

We’ll work with you to find, assess and develop your talent at scale. We’ll:

  • Identify the talent you need.
    By bringing together your own insights with market intelligence and Korn Ferry owned data we’ll give you a complete picture of the talent you need to deliver on your ESG strategy.
  • Assess the talent you have
    We’ll tell you who in your organization has the potential to deliver in your goals, suggest how you can move your talent around to meet your new needs and identify the gaps.
  • Close the gap
    We’ll tell you where you can find the people you need and work with you to recruit great candidates at every level. And we’ll upskill your current workforce at scale – addressing both the skillsets and the mindsets they will need to succeed.

Champion inclusive talent management and rewards programs

Building an inclusive organization that delivers the right employee experience and where sustainability goals are transparent and rewarded, is central to living and delivering on your ESG goals.  Education on the importance of ESG is also critical.

We’ll help you develop inclusive behaviors in your leaders and individual contributors. And we’ll work with you to transform the system itself, reshaping talent processes and rewards to ensure they are fair and equitable and drive the right behaviors and outcomes.

Create a sustainable culture and make change stick

Culture is a shared set of beliefs that provide the organization and its employees with purpose and direction. You will lose hearts and minds if you try and transform your organization without transforming your culture.

We've pulled everything we know about organizational psychology and human behavior into our proven Culture 360 approach. It helps you assess, define, design and nurture the culture needed for success rather than waiting for culture to “catch up” to the change. It provides an edge to purpose-driven companies who are committed to sustainably and ESG.

Communicate the plan and progress to all stakeholders

There is no one-size-fits all approach to communicating to the diverse set of stakeholders involved in ESG. Each has their own agenda, expectations and needs. From shareholders, investors and regulators to employees, customers, the community and suppliers

We’ll help you prioritise the needs and concerns of your stakeholders and design the best communication strategy to meet them where they are.

Let us be part of your success story

Contact us and see how our business transformation services can help.

Talk to an ESG & Sustainability expert

FAQs for ESG and sustainability

What is the “E” in ESG reporting?

The “E” in ESG considers whether the company, including its internal operations and supply chain, is being a good steward of the environment. The E addresses the organization’s environment-related impact and risks and what the organization is and isn’t doing to reduce those risks. ESG reporting should include dimensions such as the organization’s carbon footprint, waste management, pollution, nature conservation and sustainability efforts that make up its supply chain.  

What is the “S” in ESG reporting?

The “S” in ESG evaluates the social impact generated by an organization’s relationships with people, including its workers, customers, suppliers and communities. Factors that play a role in the social aspects of ESG include workplace safety; employee engagement, well-being and culture; diversity, equity and inclusion (DE&I), customer satisfaction, data and data privacy. 

What is the “G” in ESG reporting?

The “G” determines whether the organization has the right governance framework in place to serve all of its stakeholders. For organizations to do well in this area, they must clearly articulate team members’ roles and responsibilities and set expectations to ensure good decisions are made for customers, employees, shareholders, regulators and the community. 

Dimensions that may be included in ESG reporting include executive pay and rewards, board member composition, effectiveness and transparency. Stakeholders will also expect to see an assessment of how well the organization conducts audits and whether it operates ethically and with integrity.

How is ESG related to sustainability?

ESG (Environmental, Social, Governance) provides a view of a company and its long-term value potential and relevance to its stakeholders. An ESG rating or report measures performance of environmental and social impacts and the effectiveness of corporate governance in managing them.

Sustainability reinforces that environmental, social and other impacts are incorporated into important business and operational decisions. It embeds value generation into an organization’s business strategy for the long-term benefit of all stakeholders.

Why focus on ESG and sustainability now?

Expectations have never been higher for organizations when it comes to ESG and sustainability. 

  • Customers expect companies to take a stand on environmental and social issues and deliver value or they will buy somewhere else.
  • Employees desire an improved work experience and want to be where there is a deeper purpose than profits alone. 
  • Suppliers want to see business handled in a manner that is fair, equitable and sustainably-conscious.
  • Communities expect companies to respect their fellow workers while delivering products and services in a sustainable way.
  • As ESG investing and scrutiny continues, shareholders continue to hold companies accountable to achieve a higher purpose.

This is why it’s so critical for organizations to build ESG and sustainability into their business strategies. If they don’t, they’ll lose opportunities for investor funding, and they’ll lose customers. They’ll find it increasingly difficult to attract, engage and retain employees. Ultimately, they’ll put the long-term sustainability of their business at risk.

What are the benefits to organizations that deliver on their ESG and sustainability promises?

When organizations invest in ESG and sustainability, they’ll see growth and other benefits in a number of areas. For example, they’ll be able to:

  • Access larger pools of capital: Global sustainable investment has topped $30 trillion.
  • Attract and retain the best talent: The majority of professionals would take a pay cut to work at a company that aligns more with their values.
  • Build credibility and trust and enhance their brand and market reputation: Consumers prefer buying from brands they trust.
  • Grow their customer base: Nearly six in 10 consumers are willing to change their shopping habits to reduce their environmental impact.
  • Reduce costs: Sustainability initiatives can lay a foundation for more efficient operations, lowering the overall cost of operations.
  • Grow their business: Our research shows that companies driven by purpose post compound annual growth rates of 9.85% compared to 2.4% for the S&P 500 overall.

Why do many companies fail at ESG and sustainability?

Many organizations have gone public with commitments to ESG and sustainability and lofty goals that they plan to achieve by a certain year. But many of these transformation efforts falter. 

Our research has shown that two key factors can account for the difference between failure and success: senior manager leadership and organizational culture. That’s why we believe organizations need to recalibrate their approach to ESG by focusing on their people.

Here are five people-related questions that every organization should ask.

1. Purpose: How important are ESG and sustainability to us? Why are we doing this? Who are we trying to satisfy? What is our time horizon? How do we measure success? 

Purpose-driven organizations tend to be more successful. Leaders need to be able to rally around a unified purpose that aligns with the organization’s business strategies, and that purpose must resonate with people across the organization.

But it’s not always easy to figure out why you need to change. Yet, until you do, you won’t be able to identify what actions you need to take or what levers you need to pull to succeed.

2. Governance: How does our board need to evolve to oversee, enable and support delivery of our ESG and sustainability strategy? 

Boardrooms have never been more focused on ESG-related issues. Large institutional shareholders, proxy advisors, regulatory bodies, and ESG rating agencies are studying organizations’ sustainability and risk profiles more closely than ever. The most important question for them to address is how they can ensure their organization treats ESG as a holistic and strategic business imperative.

Boards should integrate material ESG issues into their oversight and support of corporate strategy and enterprise risk. For boards to fulfill these responsibilities, they need to have accurate information. 

It takes careful thought and preparation to establish an effective reporting process. First, the organization’s leadership team needs to decide what should be measured and how to measure it. Then the board must determine how to evaluate the leadership team’s work and ensure it aligns with the organization’s values, ESG targets and overall goals. 

3. Leadership and talent: How do we attract, develop and retain the leadership, talent and skills needed to drive ESG and sustainability strategy and outcomes? 

Organizations that are serious about ESG and sustainability need to cultivate Enterprise Leaders at the top. An Enterprise Leader enables their organization to perform today and transform to meet the challenges of tomorrow. 

Enterprise Leaders apply the mindsets of purpose, courage, self-awareness, inclusion and integrative thinking. They believe they have a responsibility and an opportunity to go beyond their own interests and the interests of their function to make a significant difference to others across the enterprise and outside it. They understand how the organization connects to its ecosystem and its impact on society and the environment. Our research shows that these same mindsets and beliefs are what also make great sustainable leaders.

As for talent, organizations need to ensure they have people with the right skills and knowledge to enable change. We believe five individual attributes enable companies to develop the organizational capabilities they need:

  • Analytical approach to problem-solving
  • Solutions-oriented mindset
  • Ability to influence change
  • Empathy
  • Flexibility and adaptability

These attributes are in demand, so organizations must think about ways to secure these skills. In addition to recruiting talent and filling any gaps with freelancers or contract labor, they may also be able to reskill and upskill their existing people.

4. Operating model: How do we organize to deliver our ESG and sustainability strategy, including structure, work and platforms?

To meet your ESG and sustainability goals, your organization will likely need to change the way you operate. Some organizations may need an overhaul of their structure, while others will need minor changes. Either way, you’ll need to consider whether you have organizational structures that enable leaders to lead effectively, employees to do purpose-driven work, shareholders and other stakeholders to optimize their value and customers and communities to enjoy the best possible outcomes.

Many organizations will need to shift their operating models, adopt new technology, switch their business approach or cultivate new skills to meet their sustainability goals. Here are six questions that organizations must ask as they decide how their ESG strategy will affect their operating model:

  • Who do we need to be successful? 
  • How do we need people to work?
  • What do we need people to do? 
  • When do we need people to work?
  • Why should people work?
  • Where do we need them to be based?

5. Culture and mindset: How do we create the right culture and mindsets, engage our people and reinforce the right behaviors?

The chances of successful transformation depend on whether an organization has the right culture. An investment in ESG-friendly structures, workforce strategies and governance models will not sustain change if an organization’s people aren’t aligned around ESG goals.

Cultural change can’t be a top-down endeavor. In other words, people won’t change how they think and act simply because the C-suite says they should. Instead, leaders should explain why the change matters and how it helps the organization better serve customers and society as a whole. They should ensure ESG initiatives are tied to your organization’s mission and purpose.

Leaders also should make sure that they walk the talk, showing that the organization’s commitment to sustainability and ESG is authentic. Then they should ask for people’s input, listen to their perspective and involve them in planning and other opportunities to shape the organization’s culture.