charting the path for ESG at Upwork
At qb., we know that creating effective ESG policies, protocols, and oversight requires hard work and behavioral change, which is why we're shining a spotlight on the individuals who are leading the charge. In our new series: “ESG Leaders + Governance”, we highlight the people behind the transformational actions and programs that are shaping the future of business. We’ll talk to ESG leaders from different industries and backgrounds, we'll delve into the challenges they've faced, the strategies they've employed, and the lessons they've learned along the way.
Hannah Erickson, ESG Senior Program Manager and Foundation Lead at Upwork, sat down with qb. to share 5 tips for companies trying to mature their ESG work.
published 6.15.23
Here’s what we learned:
Integrate ESG into your governance framework.
At Upwork, ESG is integrated into our existing governance framework. One key aspect is that I report through our VP of Corporate on the legal team. This connection brings two advantages. Firstly, being part of the legal team provides insights into potential concerns or sensitive topics that my colleagues may have. It helps me prepare for discussions around new disclosures or sensitive information. Secondly, reporting to our VP, who regularly communicates with the board, enables a direct line of communication. This alignment ensures that our ESG programs and strategies are effectively advanced within the company's governance structure.
Use ROI to tell a story.
Clarifying the return on investment (ROI) quickly and clearly is crucial for any successful ESG initiative. Demonstrating how ESG efforts contribute to engaging investors, customers, and clients or improving workforce retention will make all the difference. While some may feel exhausted by the need to make a business case for sustainability and impact, the reality is that we operate in a for-profit environment. Making the business case is essential because it's the reason ESG matters to a lot of our stakeholders. ESG and CSR teams are often perceived as cost centers but they can drive operational efficiencies, contribute to sustainability-related products and services, and help companies retain talent and customers, leading to increased revenue and cost savings. Articulating this value whenever possible to leaders and cross-functional partners across the company is crucial.
It's okay to shift focus.
The early days of our ESG reporting were more equally focused on E, S, and G, and our disclosures were driven largely by what we saw ESG ratings groups prioritizing. After conducting a materiality assessment and working to align our ESG strategy to our business model and the broader risks and opportunities facing the company, we recognized the need to focus more on the social issues tied to our work marketplace. That's not to say we ignore environmental topics or internal operations — Upwork continues to meet its carbon neutral commitment and drive key environmental initiatives forward — but we no longer publish a standalone emissions report, for example. Instead we're leaning into our role as a workforce innovator and finding ways to build programs and improve disclosures around the wellbeing of freelancers globally. You can read our latest report here.
While it's important to follow best practices and to be aware of external ratings and trends, especially as a public company, it's equally important to recognize that methodologies and investor preferences can shift rapidly. The landscape is complex and ever-evolving, making it challenging to prioritize external ratings alone. Balancing internal goals and initiatives with external benchmarks is key to maintaining perspective and avoiding unnecessary confusion.
Don’t shy away from policies; they might be your low hanging fruit.
Policies are a great first step in clarifying a company's commitments and expectations, and they carry a lot of weight in terms of a company's ESG performance. They can also be easier to get off the ground than other initiatives, since ESG policies typically align with what most people want to see in the world and they don't necessarily require major operational changes. They can cover areas such as human rights, environment, fair labor, diversity, and inclusion. Once you have a well-written and official document, it becomes a valuable resource. Implementing these policies effectively comes with its challenges but solidifies oversight and compliance. Sometimes, simply directing individuals to the policy as evidence of our commitment and established standards is all that's required. Remember, involving leadership in policy creation and gaining their support is a pivotal step in establishing its significance and fostering adherence throughout the organization. Having these policies in place, reviewed and approved by leadership and the board, demonstrates oversight and can contribute to improving ESG ratings and rankings.
Don’t get sucked into the politicization of ESG — the work it represents is here to stay.
The future of ESG is currently facing some challenges, with it being seen as a political term and ideology. However, looking ahead, sustainability and impact will only grow in importance and become inherent in everything we do. Rather than having a separate sustainability team, it will be integrated throughout the company. Regulatory requirements, such as climate risk reporting by the SEC, will drive this integration, making everyone aware of the risks and driving innovation. As regulations and consumer preferences evolve, I am excited to see sustainability becoming an integral part of business operations. Authenticity is crucial, especially for Gen Z, who wants companies to genuinely believe in and support sustainability. At Upwork, our CEO's commitment sets an example, and I believe this will become a prerequisite for companies to retain a dedicated workforce. ESG is a key aspect for success in the future.
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