AmCham Slovakia

How to turn routine HR activities into a strategic ESG advantage

Many companies today are investing in their employees. They offer flexible working hours, benefits, training, or mental health support. The reason is clear. They want to retain talented people and be attractive in the job market.

They often don’t even realize that these activities are also a key part of ESG. By working purposefully with human capital, companies are already fulfilling the social pillar of ESG, they just don’t talk about it in the right context. And this is where there is a lot of room for strategic shift.

Identify what you are already doing. ESG may surprise you

The first step for any company is to map out what it is already doing in relation to its employees. It often turns out that measures that were introduced primarily for the sake of competitiveness and people satisfaction are also a significant contribution to ESG. What can your company already report as part of ESG today?

• Flexible working conditions – remote work, flexible working hours, shorter work week.
• Employee health and wellbeing – mental support, ergonomic workplaces, burnout prevention.
• Diversity and inclusion – programs to support women in leadership positions, employment of people with disabilities.
• Education and development – ​​internal training, mentoring, retraining support.
• Ethics and corporate culture – transparent performance evaluation, equal opportunities for all.

If your company is already doing any of these, you have a great foundation. Now you just need to connect it to ESG standards and communicate it properly as part of your company’s long-term sustainability strategy.

Compensation and benefits: ESG is not just about how much you pay people

A quality remuneration policy is much more than just a competitive salary. From an ESG perspective, remuneration is assessed through a broader lens that includes fairness, long-term sustainability and the overall quality of employees’ working lives.

One of the key aspects is fairness and equality. Does your company have a transparent remuneration system? Are there de facto differences in salaries between men and women in the same positions? An ESG strategic approach means eliminating injustices and regular monitoring, thereby building trust and strengthening your attractiveness for the best talents in the labor market.

Long-term sustainability of remuneration is another essential factor. It is not just about short-term financial incentives, but about the overall approach to employees. Companies that actively support the career growth of their people, offer retraining opportunities and take care of their physical and mental health, build a stable and loyal work team. Such employees have higher productivity, are more motivated and are less likely to look for new job opportunities elsewhere.

In addition to direct wages, non-monetary benefits are also playing an increasingly important role. Companies that really want to improve the quality of life of their employees do not focus only on classic benefits such as meal vouchers or sports allowances. The ESG perspective includes the offer of healthcare, including mental health support, flexible working hours, or measures to reconcile work and family life. For example, parent support programs, remote work options, sabbaticals, or financial support for education can have a significant positive impact on employee satisfaction.

Companies that think strategically about compensation not only attract loyal employees, but also strengthen their ESG rating, making them more attractive to investors and business partners. Ultimately, fair and sustainable compensation is an investment in the long-term stability and success of the company.

ESG is not an “add-on”, but part of the company’s DNA

Unlike short-term HR initiatives, ESG is about a long-term change in the way people are treated. This means that it is not enough to simply introduce new benefits or launch a “diversity” program. ESG must be integrated into the company’s values, culture, and processes.

What does this mean in practice?

• ESG is not a campaign – it is part of corporate identity.
• Corporate values ​​must be clearly defined and linked to daily operations.
• Employees must perceive that the company actually lives ESG, and not just communicates about it because the law requires it.

Why is this important from a regulatory perspective?

The European Union has strict rules on ESG reporting. More and more companies will have to document how they approach long-term sustainability. For companies, this means that the sooner they get their bearings on this topic, the better. The first step, which is to find out what the company is already doing in this area, should be followed by another strategic step, which is to identify opportunities for further development and improvement. Part of this analysis of opportunities and potential shortcomings is the development of a meaningful concept that will go hand in hand with the development of the business itself and the achievement of its own business goals. The result is the adoption of specific commitments for the future, with which the company demonstrates its direction and goals.

This is a very significant signal, as companies that have clearly set ESG policies have a better negotiating position when obtaining investments, sources of financing, as well as in relation to business partners and potential employees and leaders.

RUŽIČKA AND PARTNERS Law Firm offers comprehensive professional support in the field of ESG through a multidisciplinary team led by Nada Roštek.

NAĎA ROŠTEK
Partner, RUŽIČKA AND PARTNERS

Naďa Roštek is the leading partner of RUŽIČKA AND PARTNERS' competition law, compliance and ESG practise. In addition to her work in Slovakia, she is also active in this area in the Czech Republic within the CCS Legal & Tax partner office. The latter is a member of the Association of Sustainable Business, where Naďa actively engages. Together with a multidisciplinary ESG team, she is involved in the development of corporate ESG strategies and ESG implementation projects in both jurisdictions. These activities serve as a key tool to increase value and build credibility for companies in the eyes of consumers and business partners. Thanks to her presence in both the Czech Republic and Slovakia, she is able to create unique solutions that take advantage of both markets. This enables more effective implementation of ESG strategies for clients in both countries.

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picture: Unsplash