Guest Post: Talent Mobility’s Crucial Role in the ESG Agenda
By: Dr. Tobias Preising, Global Mobility Services Partner and Tom Frense, Senior Associate, Global Mobility Services at KPMG
With ESG increasingly commanding board-level attention, Global Mobility teams are finding ways to help their organizations become more sustainable, diverse and equitable enterprises.
Customers, investors, regulators and employees are demanding that companies take responsibility for their impact on the planet and society, as well as their financial performance. Given this increasing importance of ESG to the business as a whole, each department will ultimately be responsible for supporting and embedding ESG goals into their own individual activities.
In itself, the Global Mobility function, who manages the movement of talent across borders, touches all pillars of ESG, for instance with regard to carbon emissions, diversity and inclusion of the mobile employee population or tax compliance management.
Why it matters
What sets Global Mobility apart, is its unique position in the wider organization, and its access to a broad range of data: Operating at the intersection of multiple business and people functions, it has insights into HR, talent, technology, payroll, and finance activities. As a result, it can directly contribute to reaching various goals and tackling challenges like talent attraction, employee expectations for new ways of working, pay equity, environmental impact, reporting obligations or operational efficiency. Hence, with ESG as a continuing hot topic, the role of Mobility has evolved beyond a cost center coordinating cross-border employee movements and has now the potential to be a strategic business partner and a significant driver for their organization’s overall ESG strategy.
If done right, ESG-conscious Talent Mobility not only creates value and competitive advantage for the organization and its people. It is also crucial in view of existing and future legislative requirements such as the EU Directive on Pay Transparency, the Corporate Sustainability Due Diligence Directive (CSDDD) or the Corporate Sustainability Reporting Directive (CSRD) and its corresponding European Sustainability Reporting Standards (ESRS).
Particularly the ESRS’s part defining the obligations to report on the organizations’ own workforce will play an important role: Covering working conditions, equal treatment and opportunities, and other work-related rights, the ESRS S1 requires information about several areas, like policies (S1-1), processes to remediate negative impacts (S1-3), diversity metrics (S1-9) or adequate wages (S1-10). As a people’s function, Global Mobility’s contribution in this regard is not an optional one, but its inherent duty.
Yet, current market insights show (KPMG survey during global webcast in January 2024) that for a large part of companies (43 %), there is no awareness of the current status of ESG considerations in their Global Mobility programs. Especially, a lot of Global Mobility and HR functions are not aware of the ESRS S1 reporting obligations regarding their own workforce and what it means for them. And while a few have already implemented measures, many are not sure about where and how to begin in a systematic way. At the same time, there’s a clear ambition to take action (63 %), with the main driver being employer branding and talent attraction.
What can be done
Global Mobility teams can make a difference on ESG issues in two ways: by aligning their Mobility programs with their organizations’ ESG strategy and implementing ESG initiatives within their own function. And by driving data transparency and data collection to ensure that their organization will be able to meet workforce related reporting obligations.
The environmental impact of cross-border assignments and business travel can be reduced by optimizing Mobility policies, processes and practices, leveraging technology and data, and incentivizing low-carbon choices by mobile employees.
In order to enhance the social value of Talent Mobility, responsible teams should foster diversity, inclusion and social Mobility in the mobile workforce, ensure compliance with local and regional labor standards, and support the duty of care and well-being of mobile employees and their families.
A strengthened governance and transparency can be realized by embedding ESG considerations into Mobility programs, managing tax and compliance risks, aligning Mobility objectives and incentives with broader ESG goals and KPIs, and collaborating with internal and external stakeholders along the Mobility supply chain to ensure ESG accountability and performance.
How to begin
There is no one-size-fits-all approach to ESG integration in Mobility, as each organization will have different priorities, needs and capabilities. However, some general steps are recommended to all Mobility and HR leaders to get started.
Firstly, it’s important to assess the current state of ESG maturity for the different areas of all Talent Mobility activities and frameworks. This is done by conducting a gap analysis, benchmarking against peers, identifying strengths and weaknesses, and prioritizing actions.
Secondly, alignment with the overall ESG strategy and goals of the organization is key. Engaging with the business and C-suite and understanding the ESG vision and expectations can not only define the role and value proposition of Mobility, but also get it a seat at the table.
Lastly, it is imperative to gather all necessary data to meet the organization’s reporting requirements regarding its own workforce. Experience has shown that organizations frequently uncover substantial gaps in legal compliance or stakeholder expectations during the process of doing so, while the rectification of those discrepancies to prevent any negative consequences can be very time-consuming. Hence, the immediate initiation of this step should be prioritized.
About the authors:
Dr. Tobias Preising is a Global Mobility Services Partner and Tom Frense is Senior Associate in Global Mobility Services at KPMG in Germany.