Decarbonisation in business can start with human resource management
Demand for businesses to reduce their carbon emissions and become more environmentally sustainable has increased exponentially over the past few years.
CCIWA Chief Economist Aaron Morey says decarbonisation is the new reality for businesses.
“There’s an ESG (environmental and social governance) capital tsunami coming. Climate conscious investors are rapidly shaping the availably and cost of investment funds in capital markets in line with changing customer preferences,” Morey says.
“The business community suggests WA is at a time-critical moment, where they risk losing customers and access to investment funds if they can’t demonstrate a strong and ambitious commitment to achieving net zero.”
Lack of skills and knowledge a critical barrier
CCIWA has held several roundtables with our Members on the matter of climate change and one of the key barriers holding WA businesses back from reducing their emissions is the lack of skills, knowledge and resources to do it. Participants also said they were competing with other sectors for the skills required to advance green energy projects, and they highlighted the need to import skills from overseas and upskill local workers.
That is where ‘green human resource management practice (GHRM)’ comes in.
What is GHRM and why is it important?
GHRM helps create a ‘green’ workforce that understands and appreciates a climate conscious culture. In an organisation, GHRM is achieved throughout human resource practices including recruiting, training, rewarding and developing employees to advance the business’s environmental goals.
ECU Senior Lecturer from the Centre of People, Place & Planet, Dr Mehran Nejati says companies often feel overwhelmed by the need to reduce emissions, but GHRM can be a place to start and is an important piece of the puzzle for an organisation’s decarbonisation plan.
“GHRM is about gradually helping the organisation shift and get the ball rolling by building momentum and looking at the organisation’s culture, rather than, shaking up the whole business suddenly, which can be very disrupting,” Dr Nejati says.
“It’s about helping the organisation bring in people who not only care about and are passionate about the environment, but at the same time, assist the business by providing employees with green-related training.
“Our research shows that employees working for organisations with GHRM practices will come up with innovative and creative ideas and that's what is needed to address this complex problem. If green human resource management can lead to innovative thinking and behaviour, then it could be a part of the solution for sustainability challenges.”
Inclusive leadership empowers employees to act
While some people with a green skillset are directly engaged to support the organisation in meeting its decarbonisation goals, the culture of a business can prompt other employees to contribute their green knowledge and ideas to the business as well. This ultimately comes down to the organisation’s culture and style of leadership.
ECU’s Lecturer from the Centre for Work + Wellbeing, Dr Azadeh Shafaei says, “Inclusive leadership lends itself nicely to empower and engage employees in lots of practices, mainly because the characteristics of being open and accessible, allowing employees to express themselves and their ideas, and empowering creative thinking around how the organisation can be more environmentally responsible”.
While leadership is important in implementing GHRM, Dr Nejati believes there also needs to be a balance from the bottom-up.
“While a leader can guide the organisation in the right direction, if you don’t have a bottom-up approach as well, the passion and excitement needed to be part of the solution isn’t going to be long lived," he says.
"That’s where GHRM is important, by ensuring there are people throughout the organisation that are passionate about the environment and want to be part of the change process."
Generally, the barriers holding businesses back from implementing GHRM centre around organisation culture.
Dr Nejati says one of the main challenges was people’s reluctance to change or be part of organisational transformation. Additionally, he says competition was another factor – if competitors aren’t changing or prioritising the environment, then organisations are less motivated to change.
‘Future proof’ your business
Having a workforce that is skilled, knowledgeable and passionate about climate change will help in accessing key customer markets and opening up new areas of growth or opportunity, as well as reducing any environmental and reputational risks.
“If businesses don’t do anything about climate change, eventually their future will be at risk. Bigger businesses have started to take a more proactive approach towards assessing and being accountable for their environmental footprint, and it’s growing across a myriad of other businesses as they realise their resources are finite, and stakeholder expectations around their ESG credentials are rapidly increasing,” Dr Nejati says.
Want to find out more about climate change and reducing your emissions for your business? Go to climate.cciwa.com.