The ESG factors that energy companies should be focusing on in 2024

February 13, 2024

Source: Pexels/Narcisa Aciko

Environmental, social, and governance (ESG) are three central factors in measuring the sustainability and societal impact of a company. Energy companies have been increasingly focused on reducing their environmental footprint, but in recent years, there has been a growing emphasis on social and governance factors as well.

The energy sector is facing a number of challenges when it comes to meeting ESG goals. The industry is large and complex, with a wide variety of stakeholders that have different priorities. Moreover, energy companies are under immense pressure to reduce costs and increase profits, making it difficult to invest in sustainable practices

Another challenge is that there are unclear standards when it comes to setting ESG frameworks; despite more and more companies seeing the value in ESG, there is a degree of uncertainty around how they can approach such policies. This means that many organisations lack the standards and funds to implement an ESG strategy. 

In addition, there are often inconsistencies when it comes to ESG reporting frameworks. Despite constructive progress being made in developing ESG practices, it has led to the spread of new investment terminology, which has resulted in metric inconsistencies for investors.

The 2024 Global Energy Talent Index (GETI) report looks at the rise of artificial intelligence (AI) and how it reshapes job roles, skills in demand, workplace policies and training initiatives, and more.

Read on to discover how energy companies can use AI to enhance their ESG policy to attract and retain top talent.

Environmental factors that motivate energy employees

pexels-singkham-1108572 (1)Source: Pexels/Singkham

While most energy companies are making progress to better their environmental performance, there is room for improvement.

Here’s what energy companies can do to improve environmental factors in their organisations:

Support climate change

More than ever before, energy professionals want to work for companies that are doing something about climate change

According to the GETI report, energy companies are encouraged to explore the potential of artificial intelligence (AI) in addressing environmental challenges and optimising renewable production.

To enhance their environmental performance, energy companies should focus on four key areas: 

  1. Increasing energy efficiency
  2. Diversifying energy sources
  3. Investing in renewable energy
  4. Creating a culture of sustainability

Organisations that can demonstrate progress and innovation in these areas are likely to find it easier to attract and retain top talent.

The first step that energy companies can take to support climate change is to increase their energy efficiency. By using less energy, they can conserve resources and save money. There are many ways to increase energy efficiency in the workplace. Some examples of how to reduce energy consumption in the workplace include:

  • Enabling energy-saving features on all equipment 
  • Ensuring adequate insulation
  • Educating employees on the best way to improve their energy efficiency 
  • Using variable speed drives to adapt your output of air throughout the day
  • Invest in small-scale electricity generation 

Social factors that motivate energy employees

pexels-life-of-pix-8159Source: Pexels/Life of Pix

Social factors include maintaining an ethical supply chain, donating to the community, encouraging volunteering and focusing on health and safety. 

So, how can energy companies ensure that their social values can help to attract and retain the best talent in the long run?

Here’s how:

Maintain a healthy supply chain

There are a few key things energy companies can do to make sure their supply chains are ethical. Firstly, it’s important to thoroughly vet your suppliers and only work with those that have a good reputation. Secondly, develop strong relationships with your suppliers and establish clear communication channels. 

Finally, you can also create policies and procedures to ensure that your suppliers adhere to your standards. AI can help to do this by monitoring supply chains for ethical practices, including labour rights, working conditions, and child labour, ensuring compliance with international standards and regulations.

Additionally, predictive analytics can identify potential risks or violations in the supply chain, allowing companies to take corrective action before issues escalate.

By following these steps, energy companies can ensure their supply chains are healthy and ethical.


Give back to the community

Employees like to work for organisations that give their people a sense of achievement and purpose. One way to do this is by building positive relationships with your local community. Some of the ways companies can leverage AI to enhance this effort include:

  • AI can help in auditing company policies, communications, and practices to ensure they promote diversity and inclusion. This includes analysing job descriptions for biased language and ensuring equitable recruitment processes.

  • By analysing social media and other online platforms, AI can help companies understand community concerns and expectations. This enables more effective engagement strategies and the development of initiatives that resonate with community values.

  • AI can also optimise donation and volunteering efforts, ensuring resources are directed where they can have the greatest impact.

Focus on health and safety

Employees who feel safe and secure in their work environment are more likely to be productive and stay with a company long-term. 

One way you can achieve this is by ensuring that your workplaces and sites are free from hazards, providing training on handling potential dangers, and having policies and procedures in place to protect employees. 

Providing regular health and safety training is also important for maintaining a safe work environment. 

Health and safety should be a top priority in any organization. By ensuring that your working environments are safe, you can protect your employees and create a more productive workforce.

Governance factors that motivate energy employees

pexels-rebrand-cities-1367276Source: Pexels/Rebrand Cities

There are a number of different governance objectives that energy companies need to focus on in order to ensure they are retaining the best employees. Firstly, accounting methods need to be accurate and transparent. 

This will give potential employees confidence in the company and its ability to manage finances effectively. 

Secondly, companies must focus on expanding their diversity efforts into the boardroom. Diversity in leadership shows employees that the company is committed to upholding equality and inclusion in the workplace. It also provides the company with a greater depth of experience and perspective.  This can help to foster a sense of representation and belonging amongst employees, especially minority groups.

AI can analyse data on board performance and composition, helping to identify gaps in skills, diversity, and experience. This supports more informed decisions on board appointments to ensure a diverse and effective governance body.

Not only will this help to increase job satisfaction among existing employees, but it will also make the company more attractive to a wider pool of potential employees. 

 

Find out more about what motivates employees in the energy industry 

​​The 2024 GETI report contains the latest energy sector data and insights on the employment market. Download the report to find out more about the ESG factors motivating energy professionals to make changes in their careers. 

Download the GETI report 2024

This post was written by: Leanna Seah, Content Manager