What impact might climate change have on your employees? 

And what role does HR have in tackling these challenges?

Climate change will not impact all employees equally, with a disproportionate impact on diverse talent. HR has a role to support all talent to thrive and a vital part of success in this is understanding the experiences of the whole workforce.

Environmental sustainability for businesses

The main focus of environmental sustainability for businesses is the climate crisis. Of all the environmental concerns it has the widest possible reach, the greatest potential for catastrophe, and requires the most fundamental change in business practices.

But while it is a problem that will affect organisational performance, it will also have an impact on staff. The impact on employee wellbeing, lives and homes will not affect all employees equally. In the UK, a failure to reduce temperature increases, predicted to rise by 3°C within the century (Climate Action Tracker), would inconsistently impact regional weather patterns and lifestyles. Residents in city centres may experience stifling temperatures, while those in rural areas may face a greater risk of flooding and windstorms. For global organisations, concerns will vary across their markets, with inland flooding the biggest concern in Europe, wildfires in the US and typhoons in Asia Pacific (Guy Carpenter, Climate Change Renewal Sentiment, 2022).

Most importantly, it is likely to disproportionately impact people from lower socio-economic backgrounds (UN, Climate Change and Social Inequality, 2017) – people without the resources to move away or modify their homes. It would therefore also have disproportionate impacts on the health and wellbeing of these employees, a core focus of people sustainability, and could further broaden economic inequity within society.

The inequalities present within the UK are multiplied at the global level. Within any diverse global workforce, many workers have close friends and family in lower-income countries that are more severely affected by climate change. These include countries impacted by catastrophic weather patterns and a potential loss of resources such as clean drinking water or electricity. For employees with diverse family backgrounds, the indirect impact on well-being, including financial and emotional well-being, can be significant. Ensuring there are supportive initiatives in place such as inclusive benefits and flexibility will be key considerations for HR. Furthermore, ensuring initiatives are in place to enable employees to have an impact on climate change, particularly for those most affected by it, can improve the motivation and engagement of employees.

Climate change and resource overconsumption have the potential to compound existing injustices and the social divide. Companies need to be proactive in understanding and addressing problem as they emerge and put policies in place to maximise employees’ potential contribution and ability to advance, in order to be sustainable and socially conscious in the long term.

This is challenging and new to many organisations. Here at Mercer, we encourage organisations to focus on four key areas in order to embed diversity, equity and inclusion into the heart of sustainability strategies:

  1. Diagnose
    Understand the current data to focus priorities on developing a diverse workforce.
  2. Engage
    Listening to the employee voice to highlight any issues in psychological safety, ensuring employees feel able to express their opinions and experience without fear of negative consequences.
  3. Take Action
    Review policies and practices to ensure DEI is embedded throughout the organisation.
  4. Accountability
    Incorporate DEI into existing ESG metrics.
Lucy Brown
Lucy Iremonger
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