ESG & wellbeing; how to make the planets align.


Katherine Adair, Principal Sustainability Consultant

Bringing well-being projects into the ESG agenda.

Original article by Work In Mind.

I believe there are two ways in which we can bring more wellbeing projects into our ESG agendas.

One is about incentive, educating decision makers on the long-term benefits of investing in healthier buildings, such as reduced operational costs. There are also great benefits to thinking about your wellbeing strategy early, in order to incorporate this into your building design, fittings, location and spatial plan, which will avoid costly redesign in future.

The other is about breaking down the common misconceptions about wellbeing, like it being too expensive. This education piece doesn’t appear to have filtered down to many smaller scale businesses yet, which often focus on the large fees associated with specialist equipment. In reality, you can achieve a healthy building through simple steps and in doing so invest in the experience your people have within it, aiding productivity and employee retention.

There is a lot of value in simply having strong FM and HR policies that are cheap, but require forward thinking. For example, a well-thought-out FM policy which allows employees to open windows and access fresh air, and which educates workers on the importance of doing so, could have just as much of an impact as an automated air quality monitoring solution. A recent research report from the British Council for Offices, which called for improved ventilation systems in offices post-COVID, also explored natural ventilation systems as a more economical and sustainable way to provide more fresh air to workers. Well-planned HR strategies around flexible working solutions, which play a big part in employee wellbeing, and small changes around the office such a biophilia can also have an important impact.

It’s important to remember that not all businesses have the same budget, and in order for wellbeing to become commonplace in our ESG agenda, it must be inclusive.

Commercial benefits & perceived value.

The commercial benefit of investing in wellbeing and healthy buildings is increasingly recognised, especially by those in the middle to top end of the office market. This group recognise the potential returns, employee retention and working efficiency for example, as clear-cut elements that can realise commercial value. A report by the World Green Building Council entitled Building the Business Case: Health, Wellbeing and Productivity in Green Offices found that simple steps like improving air quality, increasing natural light and introducing biophilia can improve productivity and wellbeing, whilst also reducing the energy consumption of a building.

However, this understanding is not universal. In my opinion, there can often be a lack of understanding between developers and designers of office space, and of course HR and Facilities Management departments within businesses, who might not all have the same perception of these benefits, or indeed the same motivations.

It is encouraging to see more offices investing in wellbeing, but I must reiterate that this all comes down to those quantifiable elements – such as staff retention – which make these commercial benefits more apparent to decision makers. In other sectors, the commercial benefits are not as straightforward, or perhaps not as well proven, making decision makers more reticent to invest in these measures. The healthcare industry is one example. While there have been some discussions about the benefits of healthy spaces, with access to natural views and biophilia as ways to reduce the length of costly hospital stays, these advantages are less clear-cut, and less quantifiable, which could explain why we’re seeing a slower uptake.

Dedicated experts add value.

There is a clear benefit to having sustainability or CSR directors lead on wellbeing programmes. While sustainability is very broad, it is also quite technical, and you must have a good understanding of numerous policies and industry solutions to see that bigger picture and deliver a wholistic and cost-efficient strategy. While an FM director, an HR director, architect or designer may broadly understand the concepts of sustainable practices in workspaces, they won’t be able to join the dots as well as a sustainability director can.

The importance of this role was stressed by the British Council for Offices in its recent research paper on Designing and Managing Buildings for Health and Wellbeing, which argues the importance of a company-wide commitment to improved wellness through an appointed health and wellbeing executive, for a deeper understanding of employee wellbeing.

A dedicated CSR or sustainability expert will also have a better understanding of the financial implications of investing in a healthy building, and can make more informed decisions within an agreed budget.

With this in mind, my overarching message to sustainability leads would be to remember that sustainability should be accessible to everyone, and to achieve this kind of inclusivity, it has to be cost-efficient.

There’s no point suggesting sophisticated solutions that are highly expensive or provide little benefit, because these won’t reach everyone or create meaningful change. At first, you may have to pare back your aspirations or put in measures that are more economical than you were initially expecting, but if the outcome is that what’s implemented is used by everyone, and is going to create change within a building, then that’s a great start.

Mind the gap.

One way to explain this gap is that larger companies, especially those that are listed, have to account for risks to stakeholders, of which ESG and health and wellbeing have become a major part – especially as we continue to live through a global pandemic. As a result, implementing efficient and transparent strategies has become imperative in larger businesses, resulting in these organisations becoming a lot more receptive to such issues.

Another point which large businesses have become a lot more receptive to is that ESG and wellbeing are seen as an investment risk, especially if these are not managed properly in the design and operation of a building. Companies don’t want to have stranded assets or invest in or operate a building in a way that means it’s not going to function in 10 years’ time, which has created a greater incentive for businesses to invest in ESG and wellbeing measures today.

At the other end of the market, the risk is that smaller businesses may automatically factor out or downsize their ESG and wellbeing strategies, based on common perceptions that these are too expensive. The risk here is that smaller companies may see wellbeing as an optional extra, because they focus too much on the initial capital cost, without delving any deeper into what wellbeing might bring to their building or their operations in the long term. If you consider your operational costs, investing in healthy buildings now could result in more efficient staff, less sick leave, and you’ll get more out of your building users. This is where you get the value back, but as it’s harder to quantify, smaller businesses may not always have the knowledge or the experience to appreciate the benefits of these investments.

ESG… We’re doing it already.

I believe there’s some misunderstanding in the way we label the wellbeing and ESG agendas, and what initiatives and solutions these actually include.

I already see a lot of examples of businesses implementing ESG and wellbeing initiatives in their workplaces – many of which you can read about on the Work in Mind website – but these aren’t always labelled as such. To me, existing case studies around improving office air quality, lighting, acoustics and biophilia are all great examples of changes which play a big part in developing wellbeing in the workplace. Because of this misunderstanding, wellbeing can often be seen as being too costly or simple a ‘nice to have’, when in reality we’re doing loads of it already. While this is encouraging, there’s still a big education piece that’s needed around demystifying wellbeing and making the value of these measures clear and move it on from its current perception.