Sustainability and climate change have become increasingly important issues for businesses. HRM looks at how this impacts HR, and at the environmental strategies the people department needs to apply.

Now more than ever, climate change is an issue that should be on the agenda of every business. Royal Dutch Shell was the latest company to come under pressure from shareholders over climate change, as investors insist oil and gas firms should offer more transparency and action on carbon emissions in line with the Paris climate accord.

In other developments, the Federal department of the Environment and Energy has issued guidelines to public and private sector organisations on how to integrate climate change impacts into risk management and other strategic planning activities in Australian public and private sector organisations. And with end of year financial reporting approaching, climate change risk is very much part of that agenda.

Where does HR fit into all this?

Sustainability is now a worldwide issue, and firms increasingly care about the effect of environmental issues on their competitiveness and long-term success. It has been argued that human resources are central to achieving successful environmental management.

This can be achieved by adopting green human resources management practices (GHRM). Here in a recent edited article in Asia Pacific Journal of HR, we explore what that means for professionals.

GHRM includes five dimensions: green recruitment and selection, green training, green performance management, green pay and reward and green involvement.

Green recruitment and selection (GRS)

Candidate’s green awareness is the basic aspect of GRS, and involves personality factors that enable an organisation’s environmental goals to be achieved, such as green consciousness, conscientiousness, and the agreeableness of candidates. Employees who are of environmental value have been found to actively enhance their environmental knowledge in the operational process, which in turn enhances the environmental performance of their firms.

Organisations should therefore attract and select candidates with green awareness using a series of tests to ensure that all employees are positive about environmental issues.

The next step is green employer branding. This refers to a company’s image and reputation related to environmental management, which can be formed through GHRM practices. Job-seekers can perceive a good fit between their own and an organisation’s values through green employer branding, and they may feel a sense of pride working for a company with a good environmental reputation. They also tend to take information about an organisation’s environmental performance and description as criteria to judge how organisations [more broadly] treat their employees.

Green training

Green training refers to a system of activities that motivate employees to learn environmental protection skills. It also draws more attention to environmental issues, which is key to accomplishing green objectives.

Green training can enhance employees’ awareness of pro-environmental activities in the workplace and increase their understanding about environmental protection. This makes them more sensitive to environmental control and/or prevention processes such as collecting data on waste and identifying pollution sources.

Green performance management

This refers to a system of evaluating activities of employees’ performance in the process of environmental management. Setting green targets emphasises translating environmental objectives into action plans for all staff. Creating green performance indicators means establishing a series of criteria for all members in performance appraisals – covering topics such as environmental incidents, environmental responsibilities, reduction of carbon emissions, and communication of environmental concern and policies.

Green pay and rewards

This strategy is a system of financial and non-financial rewards aimed at attracting, retaining and motivating employees to contribute to environmental goals. Combining both monetary and and non-monetary rewards has been shown to be more effective.

Non-financial incentives include green travel benefits, such as rewarding employees’ transport and travel choices.

Green tax rewards include exemptions to promote the use of bicycles, an eco-friendly car fleet and green recognition. Financial incentives such as these have been introduced by UK companies, and have had a significant impact on employees’ willingness to protect the environment.

Lastly, green recognition entails company-wide public recognition, paid vacations, and gift certificates.