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Five Priorities for HR Leaders on the Way to Recovery

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The following content is sponsored by PwC

Workforce of the Future Workforce of the Future Workforce of the Future

Five Priorities for HR Leaders on the Way to Recovery

The future of the workplace remains uncertain, with business leaders facing unique hurdles heading into 2021. To help set the course, recent PwC reports reveal five key takeaways for Chief Human Resource Officers (CHROs) as businesses refine their recovery strategies and transition plans.

With polling data from thousands of U.S.-based employees and executives throughout 2020, the above graphic uncovers critical priorities to help HR leaders navigate 2021—from fostering workplace safety and well-being to implementing technology that promotes engagement.

Priority 1: Physical Safety, Comfort, Health & Performance

Employee anxiety is running high, with polls revealing that employees are concerned about getting sick—and the risk discourages them from returning to the workplace.

  • 51% of employees fear getting sick from returning to the workplace
  • 50% would like workplace safety measures established, to feel comfortable returning
  • 45% would like safety and hygiene requirements implemented for customers
  • 35% would like contact tracing to be used, with realtime notifications if a coworker is diagnosed with COVID-19

By implementing measures to keep employees healthy, employees may feel more confident as companies transition back into the workplace.

Priority 2: Supporting Mental Health & Wellness

Studies show that employees perform better when they have workplace flexibility—and they can thrive when leaders support their well-being. The importance of mental health and wellness at work has increased under the weight of the pandemic.

Polling found that:

  • 36% of employees would like to see more humility, compassion, and empathic behaviors from their leadership
  • 33% would like to to see corporate investment in wellbeing programs, which would make them more confident in their ability to do their job
  • 72% would like to work remotely to some extent after the pandemic
  • 84% of CHROs intend to increase support for wellbeing and mental health

Investing in mental health can pay dividends, with the World Health Organization reporting that for every dollar spent on mental health treatment, $4 is gained in productivity.

Priority 3: Enable Remote Work with the Right Tools & Training

As employees continue to work remotely, there’s a pressing need to upgrade technology and resources required to be productive, collaborative, and create.

  • 55% of HR leaders were planning to implement hardware and equipment upgrades to help employees stay productive when working remotely
  • 53% were planning for improved mobile experiences for applications and data, as well as security policies to support remote work
  • Upwards of 36% of employees believed their organization was already very effective at collaboration and communication

With many organizations planning to incorporate some form of remote work into their long-term strategies, technology continues to be integral to support working remotely.

Priority 4: Maintain Organizational Culture for a Hybrid Workforce

Culture and engagement looked very different in the shifting landscape of 2020, and that will likely continue to evolve in 2021.

  • 41% of CHROs worry about weakened work culture in the virtual world
  • Nearly 50% have focused on employee productivity efforts on new virtual tools and training
  • 80% are planning for new employee benefits
  • 75% are planning for employee upskilling

While many remote employees report they may be more productive during the pandemic, CHROs should help confirm it’s sustainable in the long-term.

Priority 5: Leveraging Data Analytics

Studies show that better employee experiences can contribute to improved revenue growth, and PwC polls indicate that:

  • 42% of CFOs are optimizing their approach to data analytics to improve revenue
  • 35% are moving their applications and/or to the cloud
  • 40% of workplace leaders are concerned about workplace safety

As executives experience concern over whether long-term remote work could impact engagement and productivity—focus has been placed on leveraging data analytics and digital assets to quantify and help inform corporate strategies.

Opportunities on the Road to Recovery

Even with COVID-19 vaccines on the horizon, uncertainty about the future of our work environments is high, posing unique challenges ahead for CHROs. However, those challenges can present strategic opportunities for work improvements—from digital assets and productivity, to mental health and well-being.

Note: All statistics are from the same PwC U.S. CFO Pulse survey unless otherwise stated. PwC surveyed 330 US CFOs and finance leaders between June 8-11, 2020. 88% percent of the respondents were from public and private companies in these top five sectors: health industries (9%), consumer markets (13%), financial services (23%), industrial products (23%), and technology, media and telecommunications (20%). Twenty-nine percent of respondents were from Fortune 1000 companies. The PwC CFO Pulse Survey is conducted on a periodic basis to track changing sentiment and priorities. Now in its sixth installment, the inaugural survey was conducted March 9-11, 2020.

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An Introduction to MSCI ESG Indexes

With an extensive suite of ESG indexes on offer, MSCI aims to support investors as they build a more personalized and resilient portfolio.

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An Introduction to MSCI ESG Indexes

There are various portfolio objectives within the realm of sustainable investing.

For example, some investors may want to build a portfolio that reflects their personal values. Others may see environmental, social, and governance (ESG) criteria as a tool for improving long-term returns, or as a way to create positive impact. A combination of all three of these motivations is also possible.

To support investors as they embark on their sustainable journey, our sponsor, MSCI, offers over 1,500 purpose-built ESG indexes. In this infographic, we’ll take a holistic view at what these indexes are designed to achieve.

An Extensive Suite of ESG & Climate Indexes

Below, we’ll summarize the four overarching objectives that MSCI’s ESG & climate indexes are designed to support.

Objective 1: Integrate a broad set of ESG issues

Investors with this objective believe that incorporating ESG criteria can improve their long-term risk-adjusted returns.

The MSCI ESG Leaders indexes are designed to support these investors by targeting companies that have the highest ESG-rated performance from each sector of the parent index.

For those who do not wish to deviate from the parent index, the MSCI ESG Universal indexes may be better suited. This family of indexes will adjust weights according to ESG performance to maintain the broadest possible universe.

Objective 2: Generate social or environmental benefits

A common challenge that impact investors face is measuring their non-financial results.

Consider an asset owner who wishes to support gender diversity through their portfolios. In order to gauge their success, they would need to regularly filter the entire investment universe for updates regarding corporate diversity and related initiatives.

In this scenario, linking their portfolios to an MSCI Women’s Leadership Index would negate much of this groundwork. Relative to a parent index, these indexes aim to include companies which lead their respective countries in terms of female representation.

Objective 3: Exclude controversial activities

Many institutional investors have mandates that require them to avoid certain sectors or industries. For example, approximately $14.6 trillion in institutional capital is in the process of divesting from fossil fuels.

To support these efforts, MSCI offers indexes that either:

  • Exclude individual sectors such as fossil fuels, tobacco, or weapons;
  • Exclude companies from a combination of these sectors; or
  • Exclude companies that are not compatible with certain religious values.

Objective 4: Identify climate risks and opportunities

Climate change poses a number of wide-reaching risks and opportunities for investors, making it difficult to tailor a portfolio accordingly.

With MSCI’s climate indexes, asset owners gain the tools they need to build a more resilient portfolio. The MSCI Climate Change indexes, for example, reduce exposure to stranded assets, increase exposure to solution providers, and target a minimum 30% reduction in emissions.

An Index for Every Objective

Regardless of your motivation for pursuing sustainable investment, the need for an appropriate benchmark is something that everyone shares.

With an extensive suite of ESG indexes designed specifically for sustainability and climate change, MSCI aims to support asset owners as they build a more unique and personalized portfolio.

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Tracked: The U.S. Utilities ESG Report Card

This graphic acts as an ESG report card that tracks the ESG metrics reported by different utilities in the U.S.—what gets left out?

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NPUC Utilities ESG Report Card Share

Tracked: The U.S. Utilities ESG Report Card

As emissions reductions and sustainable practices become more important for electrical utilities, environmental, social, and governance (ESG) reporting is coming under increased scrutiny.

Once seen as optional by most companies, ESG reports and sustainability plans have become commonplace in the power industry. In addition to reporting what’s needed by regulatory state laws, many utilities utilize reporting frameworks like the Edison Electric Institute’s (EEI) ESG Initiative or the Global Reporting Initiative (GRI) Standards.

But inconsistent regulations, mixed definitions, and perceived importance levels have led some utilities to report significantly more environmental metrics than others.

How do U.S. utilities’ ESG reports stack up? This infographic from the National Public Utilities Council tracks the ESG metrics reported by 50 different U.S. based investor-owned utilities (IOUs).

What’s Consistent Across ESG Reports

To complete the assessment of U.S. utilities, ESG reports, sustainability plans, and company websites were examined. A metric was considered tracked if it had concrete numbers provided, so vague wording or non-detailed projections weren’t included.

Of the 50 IOU parent companies analyzed, 46 have headquarters in the U.S. while four are foreign-owned, but all are regulated by the states in which they operate.

For a few of the most agreed-upon and regulated measures, U.S. utilities tracked them almost across the board. These included direct scope 1 emissions from generated electricity, the utility’s current fuel mix, and water and waste treatment.

Another commonly reported metric was scope 2 emissions, which include electricity emissions purchased by the utility companies for company consumption. However, a majority of the reporting utilities labeled all purchased electricity emissions as scope 2, even though purchased electricity for downstream consumers are traditionally considered scope 3 or value-chain emissions:

  • Scope 1: Direct (owned) emissions.
  • Scope 2: Indirect electricity emissions from internal electricity consumption. Includes purchased power for internal company usage (heat, electrical).
  • Scope 3: Indirect value-chain emissions, including purchased goods/services (including electricity for non-internal use), business travel, and waste.

ESG Inconsistencies, Confusion, and Unimportance

Even putting aside mixed definitions and labeling, there were many inconsistencies and question marks arising from utility ESG reports.

For example, some utilities reported scope 3 emissions as business travel only, without including other value chain emissions. Others included future energy mixes that weren’t separated by fuel and instead grouped into “renewable” and “non-renewable.”

The biggest discrepancies, however, were between what each utility is required to report, as well as what they choose to. That means that metrics like internal energy consumption didn’t need to be reported by the vast majority.

Likewise, some companies didn’t need to report waste generation or emissions because of “minimal hazardous waste generation” that fell under a certain threshold. Other metrics like internal vehicle electrification were only checked if the company decided to make a detailed commitment and unveil its plans.

As pressure for the electricity sector to decarbonize continues to increase at the federal level, however, many of these inconsistencies are roadblocks to clear and direct measurements and reduction strategies.

National Public Utilities Council is the go-to resource for all things decarbonization in the utilities industry. Learn more.

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