Expanding the 's' in ESG - the HR perspective

August 31, 2022 | 4 minute read
Chitra Shastri
Senior Product Marketing Manager, Oracle Analytics
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 - With help from Manisha Gupta and Emily Stone

What is ESG?

Environmental, social, and governance (ESG) are the three criteria that are used to measure the sustainability and ethical impact of a company. Today, regulators, investors, and customers are all holding organizations responsible for their ESG performance and expect that companies be able to show tangible, measurable, and trackable results for their ESG initiatives.


What HR leaders need to know about the social part of ESG

The “social” in ESG relates to workplace culture or how a company treats its people. Workplace culture has become so important to employees today that it’s not uncommon for candidates to evaluate job offers not just in terms of salary and benefits, but also the company’s culture. As a result, many companies make it a priority to build an inclusive workplace culture that will attract top talent. Here are some of the key areas that HR leaders should address to improve the social aspect of their ESG initiatives:

Diversity and inclusion

Diversity and inclusion (D&I) is an integral part of a positive workplace environment. According to a McKinsey & Company report, United States businesses spend nearly $8 billion each year on D&I. The benefits of cultivating a diverse workplace within an organization are twofold:  

  1. Outward: D&I brings together different perspectives and skills that, in turn, help the organization to understand and connect with their stakeholders (regulators, investors, and customers) better.
  2. Inward: D&I boosts employee morale and engagement, resulting in improved productivity, efficiency, and job satisfaction—and ultimately—increased profitability.

D&I programs are wide ranging and can include D&I training, equitable pay, mentorship programs, and nondiscriminatory hiring practices.


Programs that focus on employee wellbeing and mental health are important additions to corporate ESG initiatives. Depression, anxiety, loss of concentration, anger management issues, and burnout are just some of the mental health issues affecting today’s workforce. Mental health is a major cause of disability, absenteeism, presenteeism, and productivity loss. Depression alone has been estimated to cause 200 million lost workdays each year at a cost of $17 to $44 billion to employers, according to the Centers for Disease Control and Prevention (CDC).

Which is why many organizations are investing time and resources to not only raise awareness about mental health through training, but also to establish processes and tools to help employees struggling with these issues.


HR challenges in enhancing social programs

Access to data

While the environmental aspect of ESG has been in the spotlight for quite some time, the social part of ESG is relatively new, which makes it more challenging for HR departments to define, track, and measure. Here are some of the inevitable challenges HR professionals run into:

What to measure

D&I and wellness programs require quality HR data. The challenge lies in obtaining this data from disparate siloed applications, some of which are external to the organizational tech stack, to present a complete and cohesive picture about organizational diversity and wellness and track areas where improvements have been made.

How to measure

It is important for HR to identify and track key performance indicators (KPIs) to optimize the people and processes in the workforce to ensure the continued success and growth of the company. The challenge is choosing the KPIs that align with the business and its overarching objectives.

How to track

You’ve got all the relevant data. You have defined our business goals and KPIs. Now, you need to choose from the myriad technology stacks available in the market the best system to extract the data, define the ESG programs, and track the said KPIs. This requires you to look beyond the reports and dashboards, beyond the historical data, to discover new organizational knowledge with workforce intelligence that connects to all your business data.

Data is everywhere in your organization, but most HR professionals are unable to advance from beyond the basic data and analytics metrics, such as obtaining numbers for recruitment and retention, into the next step of realizing their strategic vision for ESG.


How can Oracle help HR teams deliver on social and the rest of ESG

Clearly, data is just half the solution needed to address the HR challenges in ESG.  Most organizations today need to dig deeper into the data to predict future challenges and plan for them; they need to transition from being just data-driven to being analytic-driven.

Oracle Fusion Analytics for HCM is a prebuilt, cloud native analytics solution for Oracle Fusion Cloud Human Capital Management (HCM) that provides HR leaders with ready-to-use insights that help you plan and manage your ESG initiatives.  A comprehensive KPI library and out-of-the-box dashboards that use both Oracle and third-party data make understanding and measuring ESG programs easier and simpler. Diversity and wellness insights are prebuilt. You can track progress in other ESG areas by importing the relevant data. With these new insights, you can empower your decision-makers to guide your ESG strategy and move your business forward.

Learn how you can drive diversity with comprehensive analytics

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Chitra Shastri

Senior Product Marketing Manager, Oracle Analytics

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