Human resources development and sustainability

ACCORDING to the United Nations Environment Programme-Finance Initiative (UNEP-FI), a sustainable bank is one that not only understands and manages the risks that arise because of sustainability issues, but also perceives the strategic dimension of these issues. This means thinking ahead about business implications and opportunities brought about by the increasingly pervasive environmental, social and developmental challenges of our time. Sustainability encompasses the business role in balancing environmental and social (human rights and labor) issues with economic issues. And sustainable development is defined as development that meets the needs of the present without compromising the ability of future generation to meet their own needs.
Given this desire to encourage sustainable banks, the UNEP-FI developed a guide to assist banking practitioners so that they can embark on a sustainable journey with the business case that supports this endeavor. The Development Bank of the Philippines happens to be one of the select UNEP-FI members in our country. I hope this column will help spread the imperative that taking such journey for the banking community is critical to society’s well being. Allow me to share some of the key points of the guide with respect to what I consider most essential, the role of Human Resources (HR) development and management.
Weaving the sustainability expertise into the workforce DNA requires HR skill set to shift the bank’s culture by being the catalytic agent which integrates sustainability strategy throughout the employee life cycle. Based on the 2012 nationwide US study conducted by Rutgers University, employees prefer a company that will give them sense of satisfaction by making an impact in the social and environmental issues while on the job. The HR can start its sustainability strategy by embedding sustainability in core competencies and performance measurement systems. Its messaging from recruitment to training as well as in developing performance indicators must stand on sustainability parameters. HR will play many pivotal roles in the bank to ensure sustainability transformation, compliance, and organizational effectiveness.
Employees are the drivers that put the sustainability strategy in motion and to succeed in implementation, the bank requires a broad palette of skills, experiences and personalities ranging from passion down to educated and experienced talents in sustainable finance. HR must collaborate with the sustainability and business teams to identify the needed skill sets. Specific technical and specialized expertise will be required such as in the finance side requiring a blend of business and environmental acumen. Risk management will demand an even consideration of regulation vis-à-vis sustainability concerns.
Cultivating the employees needed for the sustainability agenda requires imparting in the equation the need of employees for a sound work-life balance. With the growing population of millennials especially in the Philippine setting, HR can help showcase sustainability as a career path to attract and retain talent. Millennials, in the first place, is the first generation that demanded their employers to act as forces for good.
Sustainability is perceived differently by every employee but beyond educating them about the technical requirements applicable to their roles, it will be beneficial if HR will cultivate and foster awareness as to how employees’ work and roles relate to sustainability and vice versa. One thing that can invigorate this awareness campaign is by involving top management to lead by example. Create a sense of engagement that will encompass both the bank’s and employee’s definition of sustainability to in order to ramp up interest and motivation. Give the employees a chance to act on their interest in promoting sustainability and the bank can effect a lasting behavioral change.
Cultivating a sustainability mindset in employees involves putting in place mechanisms and reward structures that link sustainability to business performance through pay or incentives. Banks should likewise provide a space for employees to voice their concerns about sustainability performance, point out improvements to existing strategies and suggest innovation.
In sum, the UNEP–FI believes that through an effective sustainability program, banks may persuade competent, talented and committed employees to stay. It offers them a sense of ownership and pride that result in long term employee retention. HR should thus aim for frequent engagement, feedback mechanisms, and recognition of relevant employee skills. The knowledge that employee input improves the sustainability strategy ultimately redounds to enhancing the bank’s core business.
 
Benel D. Lagua is Executive Vice-President at the Development Bank of the Philippines. He is an active FINEX member and a long time advocate of risk-based lending for SMEs.