Flexibility and ESG: an opportunity for CEOs and workers to see eye-to-eye

In March 2020, the global pandemic fundamentally changed the way we live and work. Amid the chaos and uncertainty, many employees were able to cut down on stressful commutes or ditch them all together by working from home.

But as the world returned to normal after the pandemic, perspectives shifted and priorities were rearranged. McKinsey’s latest CEO Excellence Survey reveals a motif running through the minds of the world’s business leaders in 2023: pragmatism. Now that the global crisis has been weathered, it is time to hone focus back onto business priorities – especially with regards to ESG and flexible working.

Sustainability must be good for business

Instead of getting caught up in “check the box” ESG exercises, rankings and ratings, CEOs are instead focusing on sustainability efforts that could lead to revenue. BlackRock’s CEO Larry Fink is quoted as saying, “We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients.”

This position erases the genuine environmental concerns and long-term sustainability goals that should drive these efforts beyond financial gains. But most importantly, it reveals an important ‘black and white’ thinking pattern which transcends ESG to straddle employer-worker relationships overall.

While 58% of global workers said they are happy with their employer’s stance on societal issues like climate change, as many as 25% of workers looking to leave their jobs in the next 12 months cited a mismatch in values as one of their core reasons for leaving And Accenture’s study on responsible leadership found that companies with high ratings for ESG performance see average operating margins 3.7 times higher than those of lower performers.

This data suggests that listening to workers on issues like ESG isn’t necessarily a step away from performance. The same is true for flexibility.

Back to the office

Business leaders are clearly feeling the effects of what Fortune calls compassion fatigue after spending time and money helping employees weather the pandemic and economic uncertainty.

Leading the charge are prominent CEOs like Meta’s Mark Zuckerberg who recently shared that employee performance would be graded more intensely at Meta. Meanwhile, OpenAI CEO Sam Altman is reported as saying that technology is not yet ready for a remote workforce. Other CEOs who have demanded that workers return to the office include Bob Iger at Disney, Howard Schultz at Starbucks, and Robert Thomson at News Corp.

Their reasons include fears that remote workers might be secretly working multiple jobs. According to McKinsey’s research, CEOs see in-office work as more productive for mentorship, creativity and innovation. In short, CEOs are looking to tighten up on flexibility to boost worker engagement and ultimately productivity. But workers don’t see it that way.

An opportunity for unity

Our own research shows that for employees, having more autonomy over working life and flexibility in when, where and how they work has a huge impact on engagement. 30% of workers said having flexibility over their working schedule and location indicated a successful work life. In fact, 30% of workers looking to change jobs in the next 12 months are looking for more flexibility. A recent study found that while managers found it harder to adapt and see positive results in a hybrid environment, the average worker valued the hybrid option as much as a wage increase.

And what about productivity? Remote workers work 1.4 days more on average than in-office workers every month – that’s 16.8 days every year. Without daily commuting to the office, workers have more time to spend with family, on life tasks and at work.

This is not to say that remote workers must be completely independent and unsupervised. There is a happy middle ground. Gartner found that 96% of workers would accept productivity monitoring in exchange for training and development opportunities, easier access to IT support or information to perform better.

Balancing ESG and flexible work whilst maximizing productivity could be common, shared goals for CEOs and their workforce. But in too many companies, this becomes a tug-of-war. What if CEOs stopped pulling and started listening? Simply allowing employees the freedom to balance personal responsibilities actually empowers them to contribute meaningfully to their professional roles, as well as fostering a culture of wellbeing and engagement.

By embracing flexibility, rather than seeing it as the enemy of good performance, we unlock new possibilities and create a future of work that is more inclusive, productive, and fulfilling for all.

Get in touch with LHH experts to explore how you can achieve more with talent strategies that embrace sustainability and flexibility.