Beruflich Dokumente
Kultur Dokumente
driving sustainable
business practices
Contents
Page 02
Executive
summary
Executive summary
Page 04
Moving toward a sustainable,
responsible and inclusive business
The term sustainability is broad, forward looking and 1. An increased focus on sustainability. Sustainable business
stakeholder oriented practices are increasingly appearing on the radar of businesses
around the world on account of changing public perception. A
Attaining sustainable development through
ka_fa[YflfmeZ]jg^gj_YfarYlagfkfgoj]Ydar]l`]Z]f]lkg^
corporate social responsibility
sustainable business practices and agree that these practices
Policy framework governing CSR in India create long-term shareholder value.
:]f]lkg^kmklYafYZadalqYf\;KJ^gjZmkaf]kk]k
2. A sustainable organization meets the expectations of
Key challenges for implementing sustainable diverse stakeholders. A true sustainable organization is able
business practices lg_]f]jYl]dgf_%l]jeZ]f]lkZq[j]Ylaf_Ynajlmgmk[q[d]
between economic, social and environmental considerations.
Such organizations are successfully able to meet expectations
Page 14 of both internal and external stakeholders such as shareholders,
Critical success factors for customers, government, employees and communities to ensure
implementation of sustainable business long-term gains for all.
practices from a people perspective 3. However, most organizations fail to implement sustainable
business practices. Often, organizations fail to implement
Creating a sustainable vision, mission, values and sustainable business practices due to inadequate integration
strategy with business strategy, lack of support from leadership, limited
Creating an aligned leadership understanding and involvement of employees at all levels as
Creation of appropriate organization structure and well as absence of systems and processes that institutionalize
governance mechanisms to drive the sustainability sustainability.
agenda 4. HR can help organizations succeed in implementing
Development of key HR capabilities to drive sustainable business practices. Although many organizations
sustainability and create sustainable HR systems and make a commitment and form a sustainability strategy, its
processes implementation, measurement and integration often becomes
Ability to attract, engage and retain the right set of \a^[mdl&@J[Yf`]dhaf\]dan]jaf_l`]^gddgoaf_c]qgml[ge]klg
people and align them to the sustainability agenda drive the organizations sustainability agenda:
Developing the ability to learn and share best Enabling and driving sustainable business practices at all
practices levels of the organization
Creating sustainable HR systems and processes
Page 30 5. The HR function will need to play a key role in addressing the
critical success factors for implementing sustainable business
Conclusion
practices.
sustainable,
of business strategy. However, increasing customer and societal
demands for economic, environmental and social responsibility
have brought sustainability issues to the surface. In the present
business
attracting and retaining talent as well as achieving long-term
hjglYZadalq&
Sustainability is not restricted to an environmental dimension.
It involves the convergence of economic development, social
equity and environmental protection to ensure long-term
improvement of the society and organizations. The most
hghmdYj\]falagfg^kmklYafYZd]\]n]dghe]floYkhml^gjoYj\
to the United Nations (UN) by the Brundtland Commission in
alkj]hgjlGmj;geegf>mlmj]af)10/$o`a[`\]f]kalYk$
Meeting the needs of the present without compromising the
ability of future generations to meet their own needs.
Many companies have taken to sustainably reporting to foster
afn]klgj[gf\]f[]$ljmklYf\]ehdgq]]dgqYdlq&L`]?dgZYd
Reporting Initiative (GRI) currently provides the global standard
^gj[gehYjYZadalq&Af*())$egj]l`Yf*$*((jekd]\j]hgjlk
with the Global Reporting Initiative (GRI), and hundreds more
d]\?JA%j]^]j]f[]\j]hgjlk1.
A historical perspective
In India, religions such Prior to industrialization, In the early 1970s, Focus shifted to need-
as Hinduism considered CSR in India was largely businesses became directly based CSR initiatives and
environment elements driven by philanthropy, engaged in mainstream was aligned with national
as gods and goddesses. religion and charity. economic development of priorities such as health and
These include the earth the disadvantaged groups. education.
Hjal`na!$oYl]j 9h!$j]
and heat (Agni) and wind
(Vayu).
5. Businesses should respect and promote human rights Dignity and respect to all
:mkaf]kk]ko`]f]f_Y_]\afafm]f[af_hmZda[Yf\
7. regulatory policy, should do so in a responsible manner
Responsibility toward law
-`llh2''\h]&fa[&af'kal]k'mhdgY\Wd]k'\h]'d]k'_d[`)**+&h\^ /`llh2''\h]&fa[&af'kal]k'mhdgY\Wd]k'\h]'d]k'_d[`)*+)&h\^
6 http://www.dpemou.nic.in/MOUFiles/SD_Guidelines.pdf 8 Guidelines on CSR for Central Public Sector Enterprises, http://www.recindia.
nic.in/download/DPE_Guidelines_CSR_Sust.pdf
10 Prophet, Reputation Winners and Losers: Highlights from Prophets First Annual U.S. Reputation Study, Prophet, 2009.
implementation
the following critical success factors from a people perspective
to drive sustainable business practices. HR plays a key role in
effective management of these critical success factors:
of sustainable
Creation of a sustainable vision and mission: To begin
with, an organization cannot implement sustainable
business practices if it does not espouse them in its ethos
business Yf\h`adgkgh`q&Alf]]\klg\]f]YnakagfYf\eakkagfl`Yl
describes its commitment toward sustainable business
practices.
from a people
agenda. It is the leadership, which is responsible for
[j]Ylaf_l`]kljYl]_qYf\\]faf_l`]kmklYafYZadalq
agenda. Leaders are role models for other employees
perspective and hence, play a key role in setting the right examples
and direction for the organization. However, it is equally
important to create a leadership pipeline aligned to
the sustainability philosophy to carry forward the
organizations vision and mission in the future.
Creation of an appropriate organization structure and
governance mechanisms to drive the sustainability
agenda: Organizations must make appropriate structural
changes and create strong governance and coordination
1414 Role
RoleofofHR
HRinindriving
drivingsustainable
sustainablebusiness
businesspractices
practices
Figure 6: Critical success factors for implementing sustainable business practices
Enabling organization structure and governance mechanisms Critical success factors for
implementing sustainable
Enabling HR capabilities business practices
mechanisms to ensure that clear accountability is professionals need to develop functional capabilities to
established and adequate power and resources are create sustainable HR systems and processes.
allocated to drive the sustainability agenda. The Ability to engage and motivate employees and align them
organization needs to identify goals and objectives, to the sustainability agenda: Apart from the leadership,
track progress and report outcomes to ensure that organizations can realize their sustainability agenda only if
the sustainability agenda is on track. Without a formal they attract and retain the right talent to ensure realization
kljm[lmj]Yf\_gn]jfYf[]e][`Yfake$alZ][ge]k\a^[mdl of the organizations goals and targets and to participate
lgY^p^gjeYdY[[gmflYZadalqYf\lgljY[cYf\e]Ykmj] and carry forward the agenda on a continued basis.
successful implementation of sustainable business
Creation of an agile organization, which is able to
practices.
learn and adapt to changes triggered by the internal
Development of key HR capabilities to drive sustainability and external environment: The path to a sustainable
and create sustainable HR systems and processes: While organization also involves the ability to continuously
the role of HR is critical in driving sustainable business learn, adapt and manage change. Organizations, which
practices at all levels and creating sustainable HR systems are able to share and replicate best practices and are able
and processes, many HR professionals lack the knowledge to continuously learn and improve from past experiences
about sustainability, how it impacts business and how are sustainable. Sustainability itself involves a change
to drive organizational change. As a consequence, HR in the organizations mindset. There is a need to create
often fails to win the trust of business despite being the mechanisms for continuous learning and effective change
natural partner for driving sustainability. Additionally, HR management within the organization.
What Focus
Stage Output
happens? area
Building an aligned leadership recorded, tracked, monitored and taken into account
for performance evaluation at the same time.
pipeline Align the rewards framework to drive sustainable
Forward-thinking business leaders understand the importance thinking. Increasingly, organizations are driving
of sustainable business practices for the long-term future of sustainable behaviors by balancing short-term
the organization and society. It is the leadership that drives and long-term incentives as part of executive
change in an organization by establishing direction, aligning compensation. Typically, organizations use
appropriate resources and inspiring through example. Leaders incentives such as equity-settled Long-Term Incentive
act as champions by taking up and supporting the cause of Compensation (LTIs) and deferred bonus to drive long-
sustainability in the organization. term thinking toward business results.
Leadership Lifecycle
leadership pipeline
Program
9hjgeaf]flAf\aYf[gf_dge]jYl]_jgmha\]fla]\Yk]l
of key practices that detail out key behaviors, practices,
values that the leadership should possess for identifying
and grooming future leaders. The group looks at three
aspects leadership of results, leadership of business
and leadership of people. The group uses tools such as
People Planning Meeting (PPM) to evaluate the leaders on
the above aspects and identify candidates who have the
potential to occupy highly responsible positions.
the sustainability agenda In the anatomy of a sustainable organization, the structure forms
the backbone. Depending upon the maturity of sustainability
As sustainability continues to go up in the priority list for initiatives in the organization, the responsibility for them can be
the C-suite, organizations are taking various steps to drive allocated in different ways as detailed in Figure 9.
sustainable business practices across levels and teams. Figure 9: Structural options for driving sustainability in organizations
However, organizations often fail to implement sustainability
Y[jgkkl`]gj_YfarYlagf\m]lgdY[cg^\]f]\Y[[gmflYZadala]k Option 1: Centralized Model
and inadequate power and resources allocated for driving the This model treates sustainability as the sole responsibility of a
sustainability agenda. separate department. The model creates a dedicated focus on
sustainability and also helps in developing specialized skills in this
The organization needs to ensure that the sustainability agenda
area.
remains on track by identifying goals and objectives, monitoring
Option 2 : Decentralized structure
progress and reporting outcomes. Without a formal structure
Yf\_gn]jfYf[]e][`Yfake$alZ][ge]k\a^[mdllgljY[cYf\ This model treats sustainability as the agenda of various business
measure success in the implementation of sustainable business mfalk&KmklYafYZadalqg^[]jkj]hgjllgZmkaf]kk`]Y\kYko]ddYkY
practices. executive level position at the company.
Option 3 : Integrated structure
In order to achieve improved clarity and maturity, organizations
emkljklYfko]jY^]oim]klagfk2 This model does not involve creation of separate functions. Rather, it
How do we embed sustainability into the value chain and lj]YlkkmklYafYZadalqYkhYjlg^]n]jqgf]kjgd]&9\\alagfYddq$kh][a[
roles in each department double up to drive sustainable business
metrics?
practices.
How should we align the sustainability strategy with
business strategy?
K]d][lagfg^l`]ja_`lh]ghd]lgg[[mhqjgd]k\]f]\af
Facilitate creation of appropriate organization structure:
l`]gj_YfarYlagfkljm[lmj]2L`]Y[lmYda\]fla[YlagfYf\
The HR function plays the role of a functional expert selection of people to occupy the roles in the organization
in understanding and creating the most suitable structure is equally critical, if not more, for successful
organization structures, creating appropriate role implementation of the sustainability agenda. It is critical that
descriptions and identifying KRAs and KPIs by @J[`][ckZgl`l`]h]jkgf%gj_YfarYlagflYf\l`]h]jkgf%
choosing an appropriate model for organization jgd]llgj][jmalYf\k]d][llYd]floal`l`]ja_`ll&
design. Figure 10 depicts EYs Organization Design Creation of appropriate governance mechanisms: HR
Model. can play a critical role in identifying key participants in
However, the role does not end at that. The most governance committees. They can work across functions to
sustainable solutions are the ones that evolve ensure adequate representation of all critical functions and
constantly. This requires the HR function to play the businesses.
Process Talent
O]dd\]f]\`a_`%d]n]dgh]jYlagfYdhjg[]kk]kYf\ Structure Roles Talent management and leadership
strong linkages & communication between Streamlined and Clear roles, development strategies to support the business
functions. responsive structure responsibilities, vision and strategy.
with appropriate accountabilities and
spans of control and indicative performance
management layers. metrics.
Governance Performance
Effective mechanisms for making decisions Performance measurement to drive
and reducing bureaucracy. Resources Capability behaviors that are aligned to the business
FTE and headcount Capability requirements vision and strategy.
requirements matched to the right
\]f]\lg\]dan]j roles and appropriate
Infrastructure superior L&D. Culture
performance.
Infrastructure (systems and property) supports Culture and behaviors aligned to organisational core
the requirements of the future design. values and consistent throughout the organisation.
Sustainability
Employer brand
Employee development Employee
Meaningful work
expectations
Career management
Rewards and recognition
Work-life balance
Work environment
In line with the long-term focus of a sustainable organization, Facilitating work-life balance: Employees wish to strike a
the rewards system must also be designed to create long- balance between their personal and working life without
term value for the employee. There is a need to blend team compromising on either. Companies, which are able to
and individual incentives for improved sustainability, as more offer highly motivated and high-performing employees,
and more collaboration is needed. Recognition schemes need a better balance between their personal and professional
to move beyond the organization and involve partners and life can attract and retain the best talent. Offering work-
stakeholders, given an increasing focus on ecosystems. da^]Z]f]lkaf[j]Yk]k]ehdgq]]afl]flagflgklYqoal`
l`]je^gjYdgf_]jh]jag\&Kge]g^l`]oYqkafo`a[`
Creating a work environment to improve performance:
organizations can help employees to achieve work-life
A healthy and safe work environment allows employees
ZYdYf[]af[dm\]]pa%laeaf_$o]ddf]kkk[`]e]k$gf%kal]
to develop an effective commitment toward the employer.
facilities such as day care and daily need services such as
A better working environment gives a sense of well-being
dry cleaners and car repairs.
created by the physical surroundings of the workplace.
The company should intentionally foster a culture that Apart from creating a compelling EVP and maintaining the
integrates with its strategic objectives. For example, balance between organization and employee expectations,
employees at a leading American multinational company HR can help in engaging employees to participate in
specializing in internet-related services and products environmental and social activities.
have a daily job of coming up with innovative solutions,
and what makes this happen is the unique working style
that encourages innovation and healthy disregard for
the impossible. Besides focusing on health and safety in
the workplace, employers need to ensure that the work
environment respects diversity.
1 2 3 4 5
Idetify the <]f]l`] Develop Embed,
Deliver the
need for change of the plan to measure
change
change the change deliver and learn
Sustainability is a desired future state for organizations. Design: HR can assess the change impact and design
However, the move toward sustainability involves a change in kh][a[gj_YfarYlagfYd\]n]dghe]flafl]jn]flagfklg
organizational and employee mindset. In addition, a sustainable bridge gaps and manage change impact. Interventions
organization needs to be agile to learn and adapt quickly need to focus on engaging and managing all stakeholders,
to changes in the external environment. HR professionals aligning people, structures, processes and systems to a
can drive the change management process in a sustainable more sustainable way of working.
organization given their unique and process-oriented skill sets Deliver: HR professionals can play a critical role in the
for leading organizational change. actual delivery of designed change management plans.
Role of HR in changing employee behaviors across the Change HR professionals can act as role models to facilitate the
Management Life Cycle change toward sustainability, motivate and engage with
The HR function can help drive the change in employee employees to manage peoples journey through the
behavior from awareness to commitment to a sustainable way period of change. At the people level, HR needs to be
of working. involved in the recruitment, learning and development and
Identify: To change employee behaviors, the HR retention of employees. At the stakeholder level, HR can
function can help in creating a case for sustainability by communicate and gather feedback to ensure operational
highlighting its impact on the organization. In this case, it business readiness to change.
needs to be highlighted that the impact may not always Sustain: In order for a change to sustain in the
be economic. Rather it can be in terms of helping the organization, HR can create monitoring mechanisms
gj_YfarYlagfZ][ge]YZ]ll]j[gjhgjYl][alar]fl`Yl^mdddk to review if the change has been effective. It needs to
its environmental and social responsibilities. They need to celebrate with employees the new way of working and
secure sponsorship from leadership to drive the change the new sustainability mindset. It is also important at
in behaviors. This means it should develop a compelling this juncture to document updated systems, process and
vision with clear and achievable sustainability objectives. policies and create knowledge management systems
Diagnose: HR professionals can also help in understanding to ensure information is accessible to existing and new
]ehdgq]]kj]Y\af]kklg[`Yf_]&L`]kh][a[aehY[lkg^ employees on the new way of working.
the change toward sustainability can also be assessed in
this stage.
30
30 Role
RoleofofHR
HRinindriving
drivingsustainable
sustainablebusiness
businesspractices
practices
The HR function therefore, has a critical role to play. However, 4. Do we have the right HR capabilities to drive the
it is up to the HR professional to assume an increased strategic sustainability agenda? Does the HR understand
role in implementing this business issue in their organization by key roles and responsibilities needed to drive the
displaying leadership on this important topic. sustainability agenda? Do they understand and possess
However, before its starts, HR needs to answer the following key competencies needed to deliver on these roles and
questions: responsibilities to drive the sustainability agenda?
1. AkkmklYafYZadalqj]][l]\afl`][gjhgjYl]nakagfYf\ 5. Do employees understand sustainability and what it means
eakkagfklYl]e]fl7<g]kl`]gj_YfarYlagf`Yn]Ykh][a[ for their roles? Does the organization have the right
sustainability strategy in mind? Does it have a clear mode of engaging and retaining its key employees and
picture about how to implement that strategy and achieve encouraging them to participate in sustainability activities?
sustainability objectives?
6. Is the organization ready to adapt to external environment
2. Is the leadership aligned on sustainability issues? Does changes? Are employees receptive to change? How
the leadership understand the risks and opportunities quickly can systems and processes be changed in the
for the business associated with sustainability? Are organization?
potential leaders available to don the mantle of driving the
sustainability agenda?
3. Akl`]]paklaf_gj_YfarYlagfkljm[lmj]km^[a]fllg\]dan]j
If its a good idea, go ahead and do it. It is much easier
on the sustainability agenda? Are accountabilities clearly
to apologize than it is to get permission - Admiral Grace
]klYZdak`]\7<go]`Yn]\]f]\_gYdkYf\gZb][lan]k
Hopper
and do mechanisms exist to track progress and report
outcomes on the sustainability agenda?
Development Advisory Services (DAS) at EY is a distinctive We work on the following thematic areas:
sub-service line which adopts a multi-disciplinary approach to CSR Advisory
provide value added professional services to the Public, Private
Yf\Fgl%^gj%Hjglk][lgjkafgj\]jlg]fkmj]l`]]^^][lan] 9a\]^[a]f[q
delivery of social development initiatives. Gender inclusions and womens empowerment
Child rights
Through our robust methodologies and
Skill development and public health.
participative processes:
O]]f`Yf[]]^[a]f[qg^gh]jYlagfkZqhjgna\af_
customized, effective and scalable CSR models.
9ZgmlH]ghd]Gj_YfarYlagf HG!
Our value proposition
Dedicated team of Extensive knowledge base Global network of over Ka_fa[Yfl]ph]ja]f[]af Extensive experience in
more than 80 HR spanning the HR value 700 HR specialists large transformational the Indian Private &
specialists in India chain across industries initiatives Public Sector space
Salient features of P&O, India Rich experience of having worked with large Government entities, Public
People & Organization India is amongst the 5 Sector Enterprises, as well as \an]jka]\Zmkaf]kk[gf_dge]jYl]k
Centres of Excellence of EY Global A team with deep expertise in the implementation of change initiatives;
Deep functional and industry experience from business case assessment through to implementation
Strong global delivery experience (e.g. USA, A collaborative approach that will engage your business leaders to
South East Asia, Middle East, Europe & Africa) challenge the status quo
An approach which is focused on business outcomes, with clear steps for
implementation
EY maintains a market-leading position for its human capital consulting services in India. EYs reputation for human capital
consulting is strong for thought leadership and service delivery, among both the business and academic communities. - HR
Consulting Marketplace 2010-2013, Kennedy Consulting Research & Advisory
Change
Core modules
Management
HR Diagnostics Organization Talent Talent Learning & Performance Rewards HR Effectiveness Prepare for
Structure Attraction Management Development Management (incl. IR) Change
HR Organization Employer Talent L&D Strategy Performance Total Rewards HR Strategy, Design &
Assessments Structuring/ Brand/EVP Strategy Management strategy Scorecard, Plan Change
/ Audits Restructuring Design/ Organization, process design Service Delivery
(Maturity, Risk, Strengthening Sector Model (incl. HR
Compliance, SSCs)
Capability,
Voice of
Customer)
HR Due Job Evaluation Source to Competency L&D Process Performance Compensation & HR Organization Implement
Diligence (incl. & Job Banding, Onboard Modeling Design Measurement :]f]lkKmjn]qk Structure/ & Sustain
IR) Grading system (Behavioral, System design Strengthening Change
Design/ Techno-
Strengthening functional)
Surveys & Governance Competency Learning Compensation HR Operational
Analytics & Decision- Mapping/ Module Design/ Banding, Effectiveness
Catalysts
Composite solutions
HR Start-up Value Chain Sales Force Managing HR Cost HR Transaction People-led HR Function Trackers,
Support Partner HR Effectiveness Leadership Optimization Support Organization Transformation Dashboards
Effectiveness Transformation
)hjg^]kkagfYdk]jna[]kZjYf\afAf\aY^gj*[gfk][mlan]
editions (2013, 2011) of the - TNS Global Brand Survey
JYfc]\)klYegf_kll`]:a_,afAf\aYkA\]Yd=ehdgq]j
2013 survey by Universum
)ZjYf\^gjLYp$LjYfkY[lagfkYf\9\nakgjqLFK?dgZYd
Brand Survey 2013
Egklj]hml]\LYp>ajeafAf\aY$[gfk][mlan]dq^gj,q]Yjk
TNS Global Tax Monitor Survey 2012
La]j%gf]lYpjeafAf\aY^gjl`]))l`[gfk][mlan]q]Yj
Euromoney ITR, World Tax Guide 2013
)>afYf[aYd9\nakgjafAf\aY^gj))[gfk][mlan]q]Yjk^gj
most number of deals from 2002 2012 Bloomberg
Egkl9[lan]LjYfkY[lagf9\nakgj9oYj\H=Yf\E9
from 2009 - 2012 by Venture Intelligence
JYfc]\Yegf_kll`]Lgh-(_j]YlhdY[]klgogjc^gj
2012 and 2011 and amongst the best in Professional
Services Great Places to Work
" L`]fmeZ]jkaf[dm\]h]jkgff]d^jgeYdde]eZ]jjekg^=Q
Global in India)
People & Organization, Advisory Services Climate Change & Sustainability, Advisory Services
Tushar Sharma
Parul Soni
Senior Professionals
People & Organization, Advisory Services Executive Director
Ernst & Young LLP Development Advisory Services
?dgZYd<]hmlqD]Y\]jfgl%^gj%hjglgj_YfarYlagfk
+91 124 612 1178
parul.soni@in.ey.com
Ernst & Young LLP
Parul Malik
Senior Professionals
People & Organization, Advisory Services
Ernst & Young LLP
Acknowledgements
Special thanks to Sampada Mittal and Prateek Jain for conducting research, analysis and compilation of the study
NCR
Golf View Corporate
Tower B
Near DLF Golf Course
Sector 42
Gurgaon122 002
Tel: +91 124 464 4000
Fax: +91 124 464 4050
Ernst & Young LLP is a Limited Liability Partnership, registered under the
Limited Liability Partnership Act, 2008 in India, having its registered office
at 22 Camac Street, 3rd Floor, Block C, Kolkata - 700016
EYIN1311-091
ED None