How to boost your ESG performance with psychological safety

I was recently asked to assist the board and leaders of an organization in understanding how they could leverage environment, social, and governance (ESG) reporting to drive psychological safety accountability. As the chair put it, they were reporting on environmental and governance goals, but they wanted to put “more teeth” into actions, accountability and reporting with respect to employee well-being and psychological safety.

There is a natural link between these imperatives. The impact that an organization has on the environment in which it operates (Environment), its relationships with people (Social), and the way that the leaders of the organization make decisions and establish policies (Governance) all have a bearing on the psychological safety of employees.

Why are organizations focusing more on ESG?

More organizations have started focusing on ESG since all UN Member States adopted the 17 Sustainable Development Goals in 2019 as part of the 2030 Agenda for Sustainable Development. The 15-year plan is a call to action to end poverty, protect the planet and improve the lives and prospects of everyone everywhere. 

The importance of these goals has been magnified as we recover from and transition out of the pandemic and in light of the ever-growing number of people worldwide struggling with financial stress and food insecurity. Creating psychologically safe and inclusive workplaces is a critical step toward improving the lives and prospects of employees.

Start by setting realistic targets

You can use the UN’s goals as a starting point for figuring out how to support employees. You likely won’t start working on all of them right away. The key is to decide where to begin based on your values, priorities and resources, and as your health and safety culture matures, you will be able to address more goals.

Start by developing a strategy to map out WHAT you will do towards inclusion and psychological safety. 

The CSA Z1003 Psychological Health and Safety Standard can help you figure out exactly HOW to get started and continuously improve your efforts using a Plan-Do-Check-Act (PDCA) approach. 

[See post on creating a workplace mental health scorecards]

Monitor and evaluate your social impact regularly

You can use pulse checks and human resource information system data to determine if programs and policies are performing as intended. In your reporting, specify how often you evaluate and the tools you are using. I recommend you review at least monthly.

When reporting, explain how you address each goal through a psychological safety lens to drive learning and accountability and show how success is measured. Include key performance indicators and. specify the behaviours and habits encouraged through programs and policies.

To give you some perspective, I’ve broken down a few of the UN’s goals related to social impact with suggestions as to how you might monitor and evaluate progress.

Goal #3: Good Health and Well-being — The focus of this goal is promoting and protecting employees’ well-being. This refers to physical and psychological health and factors like establishing prevention programs to mitigate the risk of mental and physical harm and injuries. 

You must understand what energizes or drains your employees to protect and promote mental health. Determine the psychosocial factors in your workplace that positively impact or contribute to the risk of psychosocial hazards like fatigue and stress.

Examples of metrics:

• Measure all key psychosocial hazards (e.g., percentage of employees experiencing isolation and loneliness). Why is this important? The United States surgeon general suggests that isolation and loneliness are an epidemic and a leading cause of workplace mental health issues. 

• Measure employees’ self-reported resiliency. The degree to which employees feel resilient, the environmental supports (e.g., caring leaders) they value, and the mental fitness habits that provide personal psychological protection are important indicators of health and well-being in your workplace.

Goal #5: Gender Equality — Continue focusing on the fundamental human right of gender equality in the workplace. Ensure fair pay, promotions, and career paths and allow for gender differences without judgment. Research suggests that gender balance among senior leaders is essential because female leaders can promote allyship through an intersectional lens that supports improving the workplace.

Examples of metrics:

• Measure the numbers of males and females in your organization that hold positions on the board, executive and leadership teams.

Goal #10: Reduce Inequities — Address present and past inequalities (i.e., reconciliation) to ensure no one is left behind or feels unvalued or disrespected in the workplace. Employers who care can do many things to help employees feel trusted and give them a sense of autonomy (e.g., flexible work arrangements, time management). 

Examples of metrics:

• Perceived inclusion levels (i.e., feel welcome, belong) among different populations using an intersectional lens (i.e., neurodivergent, gender fluidity, age, diversity).

• Perceived psychological safety (i.e., feel safe to speak up) through an intersectional lens

Goal # 16: Peace, Justice, and Strong Institutions — This goal is to create inclusive, safe, and welcoming workplaces free from bullying, harassment, and violence. OHS and human rights legislation mandate that employers have a duty to protect employees from these forms of discrimination. 

Examples of metrics:

• Measure the percentage of employees experiencing acts of incivility (i.e., rudeness) in the workplace.
• Measure the percentage of employees experiencing all forms of harassment and workplace violence.

We can expect that ESG reporting will continue grow in the coming months and years. On top of the UN’s call to action, many investors are examining what organizations do concerning ESG when making investment decisions.

Paying attention to how you manage psychological safety can have a significant impact on ESG performance. Organizations that invest in and care deeply about psychological safety will see a return on their investment in attracting and retaining talent, increased productivity, and fewer disability claims. You will also enhance your brand and reputation by contributing meaningfully to the UN’s Sustainable Development Goals.

Get to know the author – Dr. Bill Howatt