ESG as a trend is here to stay or at least as long as it needs to, to become mainstream. It provokes change and, generally speaking, people regard change as difficult and threatening.
Communities, companies included, are like organisms. What we would call the habits, traits or personality of a person is referred to as culture when talking about the characteristics of a community.
Each person has good and bad habits as well as blind spots. Some people have habits that are downright unhealthy. It can be very difficult to break such habits, even the ones that are potentially life threatening. Apart from addiction, the reasons are often connected with the perceived, often short-term, gains linked or attributed to such bad or unhealthy habits. Typically, a person will only be successful in breaking bad habits, when there is a gain that is larger than the gain attached to the bad habit and / or if there are other reasons that are so compelling, internal or external, that the person is intrinsically motivated and dead determined to stop and to change. Anyone who has ever gone through this process – a diet, stop smoking, start exercising, stop eating junk food – will know that this is not enough. Changing requires daily determination until a new habit, replacing the old, is created. Slacking means failing.
Organisations are no different than human beings, but they are (even) more complex. This makes change even more difficult. Companies can have a very strong culture that harbours deeply engrained traits and habits, which are often implicit. The majority of the people will not even be aware of them. One of the reasons for this is that certain traits or characteristics feel completely natural to some groups, but alien to others. As people tend to hire people that are like them, strengthening the existing culture can take place unconsciously as shown by the huge amount of data about ways to promote diversity and inclusion. As culture cannot be attributed to one or a few persons, it becomes an abstract but yet very concrete daily reality, shaping the experience of all members of the community.
Changing such collective habits, i.e. parts of the culture, requires not only identifying the desired end state, internalising the necessary compelling reason or reasons for the change and adopting the daily determination needed to break any habit. What is needed in addition is creating a critical mass of people in leading positions that will live and breathe the changes that the company, or its employees, desire to pursue. This is difficult, it will find resistance on its path and it takes a lot of courage of the people pursuing them. Also, defining the desired changes requires the powers that be to challenge their own beliefs and assumptions about what defines success and to instil the aspiration to change in enough of its leaders to bring about the desired results. This starts with them demonstrating the desired habits in everything they do and empowering others to do the same.
ESG, alongside for example scarcity on the labour market, is a compelling reason to change. Things are shifting. The old does no longer meets the standards, expectations and beliefs of more and more people. This group of people is growing fast and includes consumers, employees and investors. People want sustainability, authenticity and human dimensions: local produce, animal welfare, honest pay for work and clean air. The war on talent is also fought on this battle ground. If there ever was a compelling reason to change, ESG is it. It will make us kick bad habits, because if we don’t, we will lose out, big time.
The good news is that there is a lot to be gained. There will be change, yes, and some of the old will be lost, but that may be a good thing. If we engage in an open and inclusive dialogue within our own communities to find out what really drives us, the people that form the community, we will become better and stronger organisations. Let’s embrace change and take a leap of faith: I’m convinced that it will be worth it.