The E.ESG model puts employees at the heart of corporate sustainability

Companies that put their employees at the heart of their sustainability strategy improve not only their social impact but also their competitive edge and resilience. With this premise, the Esade Chair of LeadershipS and Sustainability has developed, in conjunction with Alsea and Grup Bon Preu, the E.ESG model, a new assessment approach that widens traditional ESG criteria (Environmental, Social and Governance) to put employees at the heart of corporate sustainability.

The new assessment approach set out in the report “Del ESG al Modelo E.ESG: La centralidad de las personas trabajadoras en la sostenibilidad de las empresas” (From ESD to E-ESG: putting employees at the heart of corporate sustainability) classifies good practices for optimizing talent management and maximizing their impact on the company. “Rather than a management tool, this model invites companies to rethink their relationship with employees. Sustainability begins inside companies with teams that are held in high regard, are listened to and aligned with the corporate mission,” said Carlos Cortés, an academic collaborator in the Esade Department of Strategy and General Management, and the head researcher of this model.

Decent wages, emotional well-being and flexible working

The report highlights key data that justify the need for this people-centric approach within business sustainability. One billion people around the globe lack sufficient income to live decently. Although 90% of countries have a minimum wage, it does not always cover basic needs, which is why the E.ESG model urges companies to go beyond legal requirements and guarantee a real living wage.

Equal pay remains a challenge: the gender pay gap is still 17% in Spain, and 13% in Europe. This demonstrates the need for transparency and equal pay policies in order to close this gap.

Emotional well-being has also become a priority in the workplace. Currently, 24% of employees leave their jobs due to mental health issues. However, only 23% enroll on support programs, even though 63% of human resource managers believe that such initiatives are essential.

Another major challenge is generational diversity. Although 82% of companies have multigenerational teams, 29% of workers over 50 are unemployed and have problems finding a job. To remedy this situation, the E.ESG model promotes the inclusion of senior talent and the use of reverse mentoring as key strategies to make the most of the experience of these professionals.

Finally, flexible work has become a must for employees. Some 64% of those who have tried hybrid working do not want to return to the office full time, whilst 81% appreciate the work-life balance more than ever.

Five cornerstones of employee-centric sustainability

The study pinpoints five key areas for E.ESG implementation: 

1. Working conditions and work relationships, including a living wage, equal pay and flexible working.  
2. Health and safety and wellbeing, with a comprehensive approach that includes physical, mental, social and financial health.
3. Diversity, equity and inclusion (DEI), to foster an inclusive culture and the elimination of unconscious biases. 
4. Career advancement and talent management, to foster on-going training, in-house promotion and management disconnection.
5. Purpose and sense of belonging, to foster ties between employees and the corporate mission by means of active listening and taking part in decision making.

Companies with a sustainable approach to employees

The report underlines that only those companies that prioritize the well-being of their teams will be able to make a positive impact on the other ESG areas. Mar Romero, director of People and ESG at Alsea in Europe, emphasizes that “Alsea believes in the sustainable, profitable and accelerated growth of our business. This E.ESG model focuses on sustainable corporate leadership. Caring for talent with sustainable thinking will help us improve the work experience of the collaborators in our company and thus comply with our Sustainability Strategy and our objectives as a company.” Meanwhile, Albert Aranda, people director at Grup Bon Preu, pointed out that “people management is a challenge now and in the future. Companies that understand how to manage differently and adjust to new realities will gain a competitive edge. At Grup Bon Preu, people are what matters most and we think it’s essential to have an E.ESG model that focuses on people and enables us to see how we can develop our organizational model, with meaning and purpose, so as to maintain a business environment that offers them opportunities for advancement whilst guaranteeing their well-being, and fair, equal treatment.”

A model aligned with EU regulations

The E.ESG Model is also aligned with European Sustainability Reporting Standards, which require companies to report on their sustainability performance. By means of advanced metrics and practices, the model aims to go beyond legal requirements and promote more ethical, sustainable management.

With a view to continuing to develop this approach, the Esade Chair of LeadershipS and Sustainability, in conjunction with Alsea and Grup Bon Preu, will foster a community of learning and good practices where companies can share their experience and methodologies for improving the sustainable management of their teams, and thus consolidate the E.ESG model as a benchmark of corporate sustainability.