ESG, Workplace Culture, and Workplace Investigations--How Does It Fit?

The rapidly growing topic of Environmental, Social, and Governance (ESG) creates new challenges for organizations who are attempting to create workplaces that are safe and inclusive environments for all.  ESG goals, when completed successfully, are now central to a company's reputation and long-term viability. In this blog post, we will talk about the new conversation around ESG, and how workplace culture and workplace investigations factor into the ESG calculus.

ESG at a Glance: ESG represents a set of criteria that investors, consumers, and stakeholders use to evaluate a company's impact and performance.

The “social” component of ESG directly involves issues such as diversity and inclusion, and workplace culture. Last year, the  SEC (U.S. Securities and Exchange Commission) conducted an investigation into the workplace culture at Activision, with a focus on allegations of sexual harassment in the workplace, and how those investigations were handled. This is a huge bellwether of the changes that are occurring regarding the scope of the social component within ESG.  Before this SEC investigation, the SEC focused more on issues related to environmental responsibility, for example.

            Moreover, success as related to ESG is not some nebulous goal. Major, deeply respected companies like Bloomberg and Morgan Stanley, are now doing work where they are evaluating companies and assigning ESG scores to these companies. These scores are important, as they are  often linked to positive financial performance and overall company reputation.

Since workplace culture now falls firmly within the scope of considerations for ESG components and scoring, it is critical that organizations have processes in place for conducting misconduct investigations in a timely, fair, and thorough fashion. When employees have concerns about the general workplace culture of an organization or have been on the receiving end of specific acts of misconduct, employers must be ready to conduct a full, thorough, and thoughtful investigation into said allegations. If the investigation concludes that the allegations of misconduct have been substantiated, the employer must then be sure that specific corrective action, which is commensurate with the allegations, is enforced.

ESG and workplace culture are two sides of the same coin when it comes to achieving sustainable success. Companies that prioritize ESG principles should work to create a workplace culture that reflects these values.