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by UNCTAD emphasises this point further while revealing that the value of sustainable investment products, including bonds and funds, reached over $7 trillion in 2023. This represents a significant 20% increase from 2022, showcasing the rising demand for responsible corporate practices. A holistic approach to compensation will position individuals and serve as an effective tool for retaining valuable employees. ESG-oriented payroll will also help meet evolving governance requirements. ESG and Payroll Practices Integrating ESG criteria into payroll practices involves addressing 3 key areas: a company as highly attractive to talented Ethical payroll practices Diversity and inclusion The companies integrating ESG often enjoy better reputations, higher employee satisfaction, Environmental considerations
to establish a clear understanding of ESG criteria. It is a set of standards used to evaluate a company’s operations concerning environmental discretion, social responsibility, and governance practices. The environmental aspect examines how a company manages its ecological footprint, including resource consumption and waste management. The social component focuses on how companies interact with employees and suppliers, emphasising fair labour practices. Governance refers to compliance with the regulations and to the internal systems that dictate how a company is directed and controlled, ensuring compliance, accountability and ethical decision-making. Relevance of ESG in Payroll ESG is a vital and expanding force in the financial market as it is reshaping investor priorities. The World Investment Report 2024
and stronger financial performance. Below we explore how companies can incorporate environmental, social, and governance aspects into their payroll systems: 1. Environmental Aspects: Companies such as Unilever have embraced sustainability by reducing their carbon footprint through eco-friendly payroll solutions as can be seen in their official sustainability reports. The adoption of sustainable solutions extends beyond Unilever, KPMG’s Survey of Sustainability Reporting 2024 , reveals that 96% of the world’s largest 250 companies report on ESG and sustainability, while 79% of the top 100 companies in the 58 countries and jurisdictions surveyed by KPMG, report on sustainability. While payroll may seem disconnected from environmental issues, organisations can adopt
the following greener practices within their payroll operations:
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GLOBAL PAYROLL MAGAZINE ISSUE 9
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