Employee engagement identified as top challenge in achieving sustainability goals -report

In the ever-evolving landscape of environmental, social and governance (ESG) strategies, organisations face a myriad of challenges, spanning from insufficient green funding to a lack of ambition.

However, a recent poll has revealed that the key challenge impacting firms in their strive to attain sustainability targets is not lack of ambition and funding, but rather a disconnect with their own workforce.

Conducted by the economic think tank, World Economic Forum (WEF), the poll says nearly half of the participating companies (48%) in surveyed countries including Kenya, cite a lack of employee engagement as their primary obstacle to achieving sustainability goals.

It is followed by unclear targets which was cited by 26 percent of the respondents. 16 percent cited regulatory complexities while 10 percent pointed out high implementation costs as the biggest challenge.

As a result, the poll report says many organisations struggle to transform intentions into impactful outcomes, despite them having clear ESG targets.

“This underscores a critical reality; that the human factor holds the key to bridging ambition towards tangible, lasting results,” the report reads.

The findings further suggest that traditional top-down approaches to ESG, where leadership sets goals and employees are expected to follow, are often insufficient in driving meaningful progress.

It says these one-sided strategies can lack the buy-in and commitment needed from all levels of an organisation, resulting in missed targets and stunted progress.

It further cautions against externally driven ESG compliance, saying a focus on regulatory mandates or satisfying external stakeholders can lack the intrinsic motivation necessary for enduring impact.

To address this, the report advocates for a shift toward a bottom-up approach as by fostering shared goals and encouraging active participation from employees at all levels, organisations will be able to create a more engaged workforce that drives sustainability from within.

“Internal engagement transforms ESG from an obligation into an integral part of organisational culture. Companies that inspire purpose and weave ESG goals into daily operations see stronger buy-in, greater innovation and sustainable results,” Wef says.

It reiterates that an inclusive model rooted in engagement begins with empowering employees at every level.

“By actively engaging employees, organisations align individual contributions with broader ESG objectives, transforming ESG from a compliance exercise to a lived organisational value.”

It adds that employee engagement significantly influences all three dimensions of ESG: First, in the environmental initiatives, the report says engaged employees would lead grassroots efforts to minimise waste, innovate processes and reduce the organisation’s environmental footprint.

Second, in the social responsibility dimension, WEF says social initiatives such as diversity, inclusion and community involvement thrive when employees are connected to their purpose.

Third is governance practices, as the dimension largely depends on transparency, ethical conduct and inclusive decision-making.

“Engaged employees promote integrity, improve compliance and champion open communication.”

Nevertheless, the report highlights the driving forces behind companies’ sustainability reporting efforts.

Customer demand emerged top, cited by 34 per cent of the respondents, followed by regulatory compliance (31%), brand reputation (26%) and investor expectations (10%).