ESG roles heating up as Retail transforms by Carmen Koch

Roles within the area of ESG are set to be among the hottest in retail again this year. With individuals having the relevant expertise and skill-sets in extremely short supply, they will need to be sourced from across other industries and then fiercely fought over.

What makes these roles especially interesting and challenging in equal measure is that they touch all parts of a business and in that sense retailers potentially use the blueprints they’ve been employing for their digital transformation strategies because these have also involved all-encompassing change.

Sustainability has clearly been seen as a force for good but there is an increasing realisation that it can also create value. There is no longer a belief that these two factors are mutually exclusive. This has arguably been strengthened by Covid-19 during which operating ethically and sustainably has no longer been seen as a nice-to-have but regarded as a strong business imperative.

As companies have responded it has undoubtedly involved sustainability coming into sharper focus. Consumers have put increasing thought into who they want to buy from and who they categorically do not want to engage with.

Against this backdrop, boards need to put ESG at the heart of their businesses and ensure it is allied to their commercial strategies and avoid placing it in isolation. Inserting the ESG leader two ranks below the CEO will slowdown and limit potential impact. ESG influence, and change, has to be brought about through senior management, HR, supply chain, PR, marketing, and corporate affairs. There is not one part of a business that it does not touch.

Pushing through an ESG agenda across an organisation is, therefore, no mean task and the employment of highly specialised individuals in niche ESG-related subjects will simply not be enough to nudge the dial. What has been learnt from digital transformations is that retailers cannot just have one person embedded in some remote department.

The individuals tasked with this challenge need to be data-driven, have commercial sense, and also boundless intrinsic energy and communications skills. It might be a case that they have studied environmental science, worked within NGO’s, or charities or undertaken policy work but the other critical skill-set they need is to have a commercial imperative. To find this capability it will likely be necessary to look more broadly across an array of industries and not just within retail and other similar consumer-focused sectors.

It will certainly be an interesting search for these ESG specialists and in order to de-risk such appointments it will be sensible to look at individuals whose previous roles have a commonality with their potential new positions – this could include them having worked across the supply chain or solving similar types of issues to those they will face in retail.

There is no doubt that there is a paucity of talent in this complex domain and that businesses need to get onto the front foot with ESG. Moves are certainly afoot in the industry: a premium fashion retailer recently appointed three new senior managers for strategic sustainability and ESG to strengthen the internal sustainable imperative; and a leading fashion pure player is focussing on “the attitude behaviour gap” to support right purchase decisions under sustainability aspects.

As well as bringing in outsiders there will be a need to grow people internally so it will be critical to identify the relevant ESG talent and to then also give them the freedom and the power that enables them to blossom and engender change. This clearly requires leaders to have the desire and hunger to empower this new grouping.

We might see another correlation between ESG and digital transformations here because the latter have been most successful when the digital natives have been prevalent within the business and helped drive the change. An ESG transformation might therefore arguably be best served, or at least expedited, alongside a generational shift in power. When Gen Z’s are the core employees in a retail business it has made a significant difference to the digital prowess of the company and we can likely expect something similar to happen with ESG.

This generational aspect also comes into play with younger people attracted to those parts of a business that are not only engaged in generating revenues and profits but are instead focused on positive environmental and social impacts. This will help power a virtuous circle of ESG capabilities within an organisation that will help future-proof it for a very different retail landscape.

Please feel free to contact me directly should you have any questions or would like to discuss this article or anything else further.

Carmen Koch