Interview: Bridging the ESG skills gap

Discover how your organisation can bridge the Environmental, Social, and Governance skills gap in this insightful interview with Victoria Hands, the OU’s Director of Sustainability.

Q: What’s the first step for businesses wanting to integrate ESG (Environmental, Social, and Governance) into their business models?

A: Education is an essential first step to embed sustainability and social impact in business operations. These are contemporary issues, and we need contemporary education to enable us to respond well. While many businesses recognise the importance of ESG factors, our recent report found that only 8% have a fully realised ESG strategy and 24% identified that lack of skills as a major blocker. To align business models with sustainability and social impact, start by educating both yourself, your leaders and your staff on ESG principles.

Q: What are the consequences of not achieving ESG goals, and how can businesses address them?

A: We can measure the health of our planet and we can see the health of where we live and work. Planetary health supports us all in our day to day lives and the activities we take part in. Unfortunately, all the measures are pointing to a rapid decline so it's essential for businesses to recognise that ESG is pivotal to their future success and can also enable them to make a positive impact on the communities they operate within. Customers now expect products and services that are good for people and planet. Failing to incorporate ESG goals into core business can lead to reputational risks, as highlighted by the 77% of respondents who recognise that ESG factors directly impact their organisation's brand and reputation.

The ESG skills gap, especially in areas like waste reduction and energy is a significant barrier. Skills in data analysis and tracking are essential, as data in itself is meaningless unless it informs decisions and demonstrates improvements in the health of our planet. An even greater opportunity exists to bring our creative potential to work with us and reimagine our businesses so that they adopt regenerative practices. Investment in upskilling and reskilling our workforce is vital, not just in leadership roles but across organisations.

Q: Can you elaborate on the skills gap in ESG and how businesses can bridge it?

A: The ESG skills gap is a critical challenge, with 80% of businesses acknowledging that they lack the necessary skills. The demand for ESG expertise is growing, but the supply is limited. To bridge this gap, organisations can offer on-the-job sustainability training and upskilling to their employees, which can also attract, retain and motivate staff. Beyond specific qualifications, ESG requires transferrable skills. Some such as data analysis, communication, and collaboration, can be found in most businesses. There are also five ways of working for sustainability: long-term thinking - taking into account future generations and understanding how our business decisions today can ensure we are good ancestors; involvement – ensuring equality, diversity, inclusion and accessibility; collaboration – extending beyond people and organisations to systems and processes; prevention – taking a precautionary approach and preventing unintended consequences; and integration – enabling positive outcomes across organisations and places.

For a practical starting point, consider our free five-hour OpenLearn course designed to promote sustainability in business by understanding our values and beliefs and engaging businesses. Or for more in-depth learning, our 10-week, 100-hour microcredential helps learners take a big picture view and then develop an action plan to reimagine and transform an aspect of their organisation for sustainability (watch the course trailer below).

Q: What role can Human Resources (HR) or People Services (PS) play in achieving ESG goals?

A: HR or PS teams play a vital role in advancing ESG initiatives. Start with a sustainability skills audit. Figure out what skills exist and what skills are missing – this is a new area of work so it is likely there will be gaps. Facilitate a thorough examination of job roles to ensure they align with evolving ESG requirements. For example, ESG considerations may require some job roles to change – risk, business continuity and finance now need to include climate risk, and this may mean a training requirement. You might also require new roles and new skills as ESG strategy matures – ESG may help businesses identify new opportunities for products and services. Additionally, HR or PS teams are instrumental in integrating ESG considerations into recruitment, appraisal, induction and also into policies and performance metrics, ensuring that daily practices not only align with the organisation's goals but are sustainable in the long run.

Q: How can businesses make the case for recruitment and training in ESG?

A: The demand for ESG experts is rapidly increasing, but there is a mismatch in supply and demand, which can affect an organisation's credibility in the ESG space. Hiring experts or investing in training for existing staff can be a compelling way to bolster ESG initiatives. As ESG becomes more integral to business operations, hiring specialists can become expensive and building capacity within the core areas of the business will ensure longevity and credibility. Identify individuals in your workforce who are keen to transition into ESG roles. Nurturing and developing internal talent is not only cost-effective, but also capitalises on existing organisational experience and aligns with the long-term need to integrate ESG into all business operations.

Q: What can senior management and the C-Suite do to drive ESG initiatives?

A: Those in management positions may also need to upskill and can use their existing expertise to enable rapid transformation for sustainability. Embracing lifelong learning sets an example for others. Management can make it clear that ESG is everyone's responsibility. They can create a working environment in which employees are encouraged to highlight issues, propose changes, and find better ways to operate sustainably. The C-Suite, including Chief Sustainability Officers and CEOs, should consider ESG as a strategic driver and ensure it has a seat at the board level. Leaders will need to embed ESG goals in organisational strategy, track progress, and incorporate ESG into employee goals and remuneration. Additionally, fostering an environment that empowers your people to speak out about issues can leverage your organisation's reach and platform to make a meaningful difference.

How the OU can help close your ESG skills gap

Sustainability and societal impact are at the heart of the OU’s mission: “We are dedicated to creating and sharing knowledge and learning to realise social and environmental justice.” (OU website)

You can acquire the essential skills for successful ESG implementation through various courses offered by the OU.

Course learning outcomes include:

• Distinguish how you and your organisation uniquely contribute to sustainability agendas, including just transition, industrial decarbonisation, the green skills agenda, and the Low Carbon and Renewable Energy Economy (LCREE)
• Involve a diversity of stakeholders to identify potential quick wins for transformative change
• Design a sustainability action plan appropriate for your organisation which will effect long-term change.

Many employers find short courses like microcredentials valuable for quickly upskilling and reskilling staff in just 10-12 weeks. See the full list of professional development courses.

Read our report on how businesses can get ahead on ESG or get in touch to discuss how the OU can support you in your ESG journey. We can work with you to respond to your unique business objectives and individual skills needs.