How HR management can create true value with ESG

Apr 14, 2025

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As the EU mandates companies to report on their sustainability efforts, a new era of accountability is transforming how organizations approach their human capital. “But we should not lose ourselves in tree-planting initiatives or volunteer programs. Focus on getting the fundamentals right first,” says Lesley Vanleke, Talent Management and Career Development Expert at delaware. "This external pressure gives us a chance to bring topics like employee well-being to the forefront," adds Vlerick professor Koen Dewettinck.

Prof. dr. Koen Dewettinck

Professor of Management Practice in Human Resources Management, Vlerick

Lesley Vanleke

Talent Management and Career Development expert, delaware

ESG: a strategic opportunity for HRM

The European Union's Corporate Sustainability Reporting Directive (CSRD) requires large companies to report on their efforts across all ESG dimensions (Environmental, Social, and Governance). This includes transparent reporting on human capital management, diversity practices, employee well-being, and talent development initiatives. HR professionals can leverage this framework to ensure talent investments deliver lasting returns while creating value for both the organization and its people.

Current HR challenges

Engagement surveys and platforms such as Greendoor show that employee feedback often focuses on issues with a company’s core processes. While initiatives such as green loans, tree-planting, volunteer programs, or cycling allowances are valuable, they shouldn't replace a solid foundation of clear expectations, development opportunities, and strong leadership.

Most companies recognize the importance of human capital, yet key employee engagement indicators reveal concerning trends. For instance, a third of employees report experiencing daily stress at work. Recent challenges - from COVID disruptions to geopolitical uncertainty - have further complicated HR management.

The Vlerick HR barometer shows that 78% of respondents say DEI (Diversity, Equity, and Inclusion) is part of their company mission, only 36% have dedicated diversity budgets.

Sustainable talent management: from strategy to action

While many companies lose themselves in tree-planting initiatives or volunteer programs, the ESG requirements don't demand new initiatives or increased budgets. They call for stronger, more effective HR fundamentals. In today's tight labor market, HR management must maximize the potential of existing workforce through:

Ensuring employees understand their roles and responsibilities,
Providing positive guidance and feedback to ensure growth,
Equipping employees with the necessary skills and technical tools to perform their roles effectively,
Ensuring that employees’ roles are engaging and aligned with their motivation and talents.

However, even the best HR strategies cannot compensate for poor leadership. Organizations must carefully select and develop leaders who are effective people managers, as team dynamics and management quality directly impact employee wellbeing and productivity.

Even if Europe mandates ESG requirements, companies can still manipulate their reports to create the illusion of compliance. I believe it's healthy to create better alignment between external messaging and internal practices.

Koen Dewettinck, Professor of Management Practice in Human Resources Management, Vlerick

Beyond compliance: creating a culture of respect

The true power of the ESG framework lies not in regulatory compliance but in its ability to transform organizational culture. Companies that excel in sustainable talent management create environments where employees feel valued, supported, and equipped to face future challenges.

"Organizations that truly differentiate themselves score highly on respect," notes Professor Dewettinck. "They don't just treat employees respectfully – they demonstrate consistent respect through everything they say and do."

By embracing the social component of ESG, forward-thinking HR leaders can build workforces that are not only more engaged today but also more resilient tomorrow. In a world of constant change, this may be the most sustainable investment any organization can make.

Organizations that truly differentiate themselves score highly on respect. They don't just treat employees respectfully – they demonstrate consistent respect through everything they say and do.

Koen Dewettinck, Professor of Management Practice in Human Resources Management, Vlerick

How can delaware support your ESG journey?

At delaware, we don't just help companies report on ESG—we help turn sustainability into a competitive advantage through our comprehensive approach:

Strategy: We align ESG priorities with your business goals through materiality analysis and targeted KPIs
Data management: Our technical experts consolidate ESG data from diverse sources into our Green Data Lake platform, optimizing your data architecture for sustainability reporting
Reporting & analytics: We develop intuitive dashboards that track progress and generate insights to drive improvement
Engagement solutions: From AI-powered safety monitoring to learning applications, we offer tools that engage employees in your sustainability journey
Employee experience (EX): We enhance workplace culture by analyzing both everyday interactions and significant milestones