Employment and ESG awareness: a new way to promote fundamental rights?

Emanuele Licciardi

Morri Rossetti, Milan

Emanuele.licciardi@morrirossetti.iti

Elena Dongellini

Morri Rossetti, Milan

Elena.dongellini@morrirossetti.it

Emanuela Lorusso

Morri Rossetti, Milan

Emanuela.lorusso@morrirossetti.it

The Sustainable Development Goals of the United Nations: a broader lens to examine health and safety compliance

Environmental, social and governance (ESG) factors are becoming increasingly relevant in everyday life, mainly thanks to the United Nations Organisation, which created a list of 17 ‘Sustainable Development Goals’ to achieve a better and more sustainable future.

In 2015, all UN Member States, in a powerful display of global partnership, adopted the 2030 Agenda for Sustainable Development. This agenda sets out a shared roadmap for peace and prosperity for people and the planet now and in the future. At its core are the 17 Sustainable Development Goals (SDGs), which call for urgent action by all developed or developing countries. These goals acknowledge that eradicating poverty and addressing other disadvantages must be accompanied by efforts to improve health and education, reduce inequality and stimulate economic growth. All of this needs to be completed while also addressing the climate crisis and working to protect oceans and forests, a shared responsibility that everyone must shoulder.

ESG factors are not just buzzwords; they actively reshape our everyday lives. In particular, SDG 8 is a cornerstone of this transformation. It advocates for ‘decent work and economic growth’, a vision that ensures all workers have a safe and secure working environment and is a testament to the importance of ESG factors in the workplace and society.

Such a provision has been implemented in various aspects of employment relationships, for instance, regarding safety and health within the workplace. Being ESG compliant also means working towards making employers more aware of the many ways to prevent typical risks of dangerous activities and sanction them whenever they violate the relevant regulations, beyond the mere practical breach of the existing norms, but also when their conduct is potentially damaging to the environment and social rights.

One way this could be achieved is by implementing the UN SDGs. They require that, by 2030, facilities and companies shall be entirely re-organised to make them more sustainable in connection with the resources they use and the environmental awareness of the technologies they exploit in industrial processes.

Although Italy already holds a consolidated act on health and safety within the workplace – which introduced indeed a very detailed and complex set of rules – it will be necessary to update its provisions in light of these new targets. In particular, employers shall ensure that, other than taking care of the employees executing their daily activities, the companies’ internal structures are organised with a more holistic approach, thus taking into account all the potential consequences of each of their interventions.

As of today, though, no change has been implemented to this legislation considering the above new paradigm, and the adaptation of the rules mainly relies on case law interpretation or good practices.

Gender equality as a defining aspect of the ESG agenda for Italian employers

In addition, attention to ESG themes has increased, with more and more companies focusing on integrating sustainable and socially relevant practices. Gender equality has assumed a significant role among the defining aspects of ESG.

Gender equality is not just a social issue; it is a business imperative. Companies that invest in gender equality create an inclusive working environment that attracts and retains high-quality talent and enhances their ability to innovate and solve problems. This creates a positive and attractive image for job seekers.

Creating a positive and inclusive working environment can also help reduce company staff turnover. In addition, it has been proven that gender diversity within top management leads to better and more balanced decision-making in the enterprise. Indeed, strategies adopted in an inclusive environment are more representative of the needs of many individuals, helping to improve the company’s reputation and trust with customers.

Promoting gender equality can lead to increased productivity and financial performance of firms. Indeed, sharing different perspectives and working with a more collaborative approach encourages innovation and fosters a more productive work climate.

Companies committed to promoting gender equality reap significant benefits. They build a positive reputation that resonates in the marketplace. Consumers are increasingly aware of the ethical and socially responsible practices of the companies they interact with. A good reputation can also attract investors who seek out socially responsible companies, opening up new opportunities for financing and partnerships.

Investing in gender equality is ethical and expected in many jurisdictions. Many countries have adopted regulations requiring companies to promote gender equality.

In Italy, the commitment to gender equality is enshrined in Law No 162/2021, which introduced a national system of gender equality certification. This legal framework aims to promote transparency on labour processes and to reduce the ‘gender pay gap’.

The certification is issued by certifying bodies accredited by Accredia, a central accreditation institution. In order to issue the certification, the accredited body must assess that companies have adopted specific Key Performance Indicators (KPIs) to measure actions to promote and protect diversity and equal workplace opportunities. More specifically, such KPIs measure the degree of maturity of the organisation in terms of gender equality, with indicators on culture and strategy, governance, human resources-related processes, women’s growth and inclusion, pay equity and parenting.

The certification process is open to companies of all sizes and is based on the UNI/PdR 125:2022 gender equality standard issued by UNI, the Italian standardisation body, on 16 March 2022.

The UNI/PdR 125:2022 outlines guidelines for managing gender equality within organisations. It requires the implementation of KPIs relating to gender equality policies. This practice involves measuring, reporting and evaluating gender-related data to address existing gaps and integrate a new gender equality approach into the organisations’ core. The goal is to create sustainable and lasting change over time. To comprehensively measure performance, the guidelines identify six strategic assessment areas for different variables, ensuring an inclusive and gender-equal organisation: culture and strategy; governance; human resources (HR) management processes; opportunities for women’s growth and inclusion in business; gender pay equity; and parental protection and work-life balance.

In addition to the certification process, which remains voluntary, companies in the public and private sectors with more than 50 employees must prepare a report on the status of male and female employees every two years (as set under Article 46 of the Equal Opportunity Code and implemented by the Ministry of Labour).

Significant economic incentives have been introduced with the abovementioned Law No 162/2021 making public funds available to cover the costs of technical assistance for the start-up of gender equality certification paths and of the certification costs for small, medium and micro enterprises. Moreover, companies that have received a gender equality certification are eligible for a reduction of social security contributions. Further incentives are related to participation in state aid grants co-financed through European funds and to involvement in public tenders.

Measures to promote ‘clean’ transportation to and from the workplace

Italy is also moving towards a more ESG-compliant landscape by supporting employees with ‘cleaner’ transportation to and from the workplace. According to the latest regulations, companies with over 100 employees must adopt a ‘Home-Work Travel Plan’ by 31 December each year. This plan aims to develop alternative forms of sustainable mobility and make it easier for employees to access them.

The employer must also appoint a ‘Mobility Manager’ to design and promote the plan’s content and implementation and facilitate the transition outlined in it.

Conclusions

Italian lawmakers have been increasingly focused on keeping up with the new priorities set by the changing economic and organisational environment. However, this process has resulted in different approaches. For health, safety and sustainability measures in the workplace, there is a total reliance on current rules and their interpretation by the courts and the operators. Meanwhile, new laws have been introduced to address sustainable mobility and gender equality, requiring companies to make additional compliance efforts, with some incentives provided in the case of gender equality.

It is still too soon to understand whether the above approaches will be effective in helping employees handle work-related aspects of their lives differently or if they will become an additional hurdle for employers without a significant impact on their organisations. The first experiences of implementation of this new mix of obligations and voluntary but supported programs show an increasing awareness on gender equality matters. Evidence of this is the hundreds of entities which, since 2022, have already obtained the certification according to the UNI/PdR 125:2022 gender equality standard noted above.