For those involved in expatriate management and HR, the cost of living basket is a practical tool. It's a collection of essential goods and services that compare living costs across regions.

As an Asian talent mobility membership association, we have an appreciation for ECA's commitment to updating and maintaining a representative cost of living (COL) basket. This tool has evolved to better reflect diverse global consumer habits, particularly those from Asian and non-US cultures, compared to its previous iteration that included items like canned corned beef and DVD rentals. ECA's basket now includes over 170 items, ranging from tennis balls to various fruits and vegetables, providing a comprehensive overview of living expenses, excluding accommodation and education. This makes it a valuable resource for talent mobility work.

The blog post "From Blockbuster to Netflix: the evolution of ECA's COL basket" offers an enjoyable article filled with nostalgia and insights into the changing world. The COL basket also mirrors modern consumption trends by incorporating contemporary food items such as frozen pizza, soy milk, and premium ice cream, aligning with healthier and more diverse food choices. Technological advancements are reflected as well, with broadband internet costs and video-streaming subscriptions replacing outdated items like inland postage and DVD rentals. This progression captures the actual cost of living in today's digital age.

To cater to the diverse dietary and lifestyle preferences of expatriates and in consideration of Asia's growing talent mobility, the basket now includes items such as instant noodles, tofu, and sushi rice, reflecting staples from Asian countries. This ensures more accurate cost calculations and fair salary adjustments for expatriates from these regions.

Beyond that, it’s a great read because of its insights into the complexity of maintaining COL data that reflects the existing assignee population and their long-term spending patterns.  

A post from our ESG Committee

As the relocation industry embraces sustainability, one of the most carbon-intensive processes in relocation apart from flights is the shipment of household goods. Holly Naylor from the ATMA ESG Committee recently spoke with Michael Johnsen, Vice-President of Asia Region at Arpin International Group, to gain insights on current trends, the carbon footprint of shipments and how the industry is evolving to address it.

The Carbon Cost of Shipping

Maritime transport is the most carbon-effective method for moving goods, releasing a small proportion of CO2 emissions per tonne-kilometre compared to other modes of transport such as trucks, trains, or planes. Global total shipments of all types are responsible for 2.1% of the world's CO2 emissions, according to the World Shipping Council.

Household goods shipments are the second most carbon-intensive component of relocations after flights with air shipments being more carbon-intensive than sea shipments. A report suggests that an average international move can produce up to 2 metric tons of CO2. Reducing shipment volume by just 15% could eliminate 150-300kg of carbon per move.

Steamships in particular are "extremely inefficient still," Johnsen says, given their reliance on fossil fuels. However, he expects airlines to make quicker sustainable progress given the pressure from consumers and higher associated costs. Johnsen notes it is also challenging to measure precise emissions as a half-full container still makes the same journey as a full one. However, reduced volume means less weight and packing materials, which likely lowers the overall footprint to some degree.

Less Container Load (LCL) – A More Sustainable Option?

LCL is a cost-effective and more sustainable shipping method that allows multiple shipments from different individuals or companies to be consolidated into a single container. This approach ensures that the container space is fully utilized, even if a single Assignee’s household goods shipments do not fill an entire container.

The process of LCL involves the following steps:

• Collection of goods from various assignees
• Consolidation of shipments at a warehouse or container freight station (CFS)
• Loading the consolidated shipments into a single container
• Transportation of the container to the destination port
• Deconsolidation of the shipments at the destination CFS
• Final delivery of individual shipments to their respective owners

By consolidating shipments, LCL offers several benefits:

• Cost savings: Assignees only pay for the space their shipments occupy within the container, rather than bearing the cost of an entire container.
• Reduced carbon footprint: Consolidating shipments helps minimize the number of partially filled containers transported, thereby reducing the overall carbon footprint of the shipping process.
• Flexibility: LCL allows assignees with smaller shipments to transport their goods without having to wait for a full container load.

One potential drawback is that LCL shipments may take longer to reach their destination compared to full container load (FCL) shipments. This is because the consolidation and deconsolidation processes require additional time and handling and are a key consideration when considering an Assignee’s timeline in conjunction with the move into a new apartment upon arrival in their new country.

Driving Sustainability Through the Supply Chain

Multinational corporations are increasingly demanding that their suppliers, including relocation and shipping providers, invest in sustainability programs and carbon accounting. RMCs in turn require movers to step up their environmental initiatives to remain part of the supply chain. Arpin for example has invested in World Favor, a carbon emissions accounting program. As a company, Arpin also has a long history of environmental stewardship thanks to its President Peter Arpin’s personal passion for sustainability, which translates with the corporate focus on such programs today.

Reduce, Reuse, Relocate?

One proposed solution is reducing the volume relocated. Another is relying more on rental furniture. However, buying new furniture upon arrival in a new location may not be truly sustainable, as cheap furniture wears out and ends up in landfills after a few moves.

Shipping high-quality personal furniture may potentially generate less waste in the long run. One report on the carbon footprint of new furniture suggests that a regular item of furniture generates approximately 47 kilograms of CO2 equivalents (CO2e) or more during the manufacturing process.

Driving factors like cost are organically reducing shipment volumes already. Younger assignees tend to move less, have fewer belongings and lump sums are gaining popularity. However, families will never fully give up shipping household goods as their needs grow as they grow. Tighter corporate relocation policies will likely remain the main lever to shrink shipments.

The Quest for Greener Packing Materials

Using greener packing materials is another key initiative. Across the industry, moving companies are shifting from plastics to more recyclable paper-based materials. However, these are costly and less effective at preventing damage - a key concern for assignees and corporates. Striking the right balance remains a challenge notes Johnsen.

Harnessing Clean Energy and Human Power

Some progress is being made in the US with renewable energy, such as using solar to power truck cabs and reduce idle fuel consumption. There are also several shipping industry initiatives for greener shipping fuels on the horizon. However, many core aspects of moving still require significant human labour that can't easily be replaced by technology or clean energy. Packing and loading will likely always need human hands.

The Path Forward

The relocation industry has a long sustainability journey ahead, but progress is being made. Accreditation bodies like FIDI require environmental progress from movers. Resources from industry groups like FIDI and regional organizations like ATMA are raising awareness. FIDI has also recently created a carbon footprint calculator for the industry in collaboration withWorld Favor and sustainability is one of the key themes for the 2024 FIDI conference.

"As an industry globally, we are working towards making progress in emissions and environmental sustainability," Johnsen affirms. By shining a light on the often overlooked social and governance aspects, FIDI is helping drive the industry towards a more comprehensively sustainable future.

FIDI and other industry groups are also broadening the focus to encompass the social and governance aspects of ESG, not just environmental sustainability. "I always talk about the S and the G as well. I think that's really neglected often," Johnsen points out. By holding its members to high standards on social and governance matters, FIDI is ensuring the industry moves forward in a thoughtful, responsible and ethical manner.

While household goods shipping may never be emissions-free, a multi-pronged approach of reducing volume, using greener materials, tapping clean energy and working closely with all stakeholders can shrink its carbon footprint. This balanced approach acknowledges that true sustainability requires addressing all three pillars of ESG.

On 6th May in Bangalore, ATMA conducted its first in-person networking event in India.

Despite the inclement weather, we at ATMA were humbled to receive 41 guests for the evening. The guests included a healthy mix of in-house corporate mobility professionals and service partners.

Attending ATMA Board of Director members, comprising Avrom Goldberg, Joanne Yee, and Dharmesh Kothari, introduced the mission and vision of ATMA to the attendees. The level of curiosity shown by the attendees towards the objectives and vision of ATMA has been very encouraging. The participants also shared their interests in how they could contribute to the vision of ATMA.

Joanne Yee shared the details about the Mentorship Asia Program (“MAP”) and how it is a differentiator for ATMA. MAP has attracted a lot of interest, and we look forward to expanding the program to India-based Global Mobility Professionals. The participants have expressed their excitement about ATMA and how they can best contribute to expanding the reach of ATMA.

ATMA looks forward to increased participation from global mobility professionals to achieve its goals in the Asia Pacific region. 

Our deepest thanks to the sponsorship and coordination provided by IKAN Talent Mobility and to the sponsorship by USI Law.

In today's dynamic business landscape, the need for talent mobility has never been more pronounced. As organizations strive to thrive in an era of rapid change and disruption, attracting, retaining, and deploying talent effectively across geographies and functions is crucial for sustained success.

The EY Mobility Reimagined Survey provides insights that are directly applicable to your organization's talent mobility strategies. Let's explore the key findings that validate the importance of talent mobility in today's evolving workplace:

• 79% of organizations view talent mobility as a strategic priority for achieving their business objectives.
• 74% of organizations acknowledge that mobility programs contribute to building diverse and inclusive teams
• 63% of organizations report that mobility programs have a positive impact on employee retention
• 72% of organizations use mobility programs to address talent shortages

Strategic Talent Allocation: The survey illuminates one of the central themes: the strategic importance of talent allocation. In an era where skills gaps are widening and competition for top talent is fierce, organizations must have the agility to deploy talent where it's needed most. The survey reveals that 79% of organizations view talent mobility as a strategic priority for achieving their business objectives. This underscores the critical role of mobility in optimizing resource allocation and driving organizational agility.

Accelerate Innovation and Growth: Talent mobility is a powerful tool that not only fills skill gaps but also accelerates innovation and growth within your organization. The survey reveals that 68% of organizations believe that mobility programs enhance innovation by facilitating the exchange of ideas and best practices across diverse teams and geographies. By enabling employees to gain exposure to new markets, cultures, and perspectives, mobility fosters a culture of continuous learning and creativity, fueling organizational innovation and competitiveness.

Building High-Performing Teams: Effective talent mobility is instrumental in assembling high-performing teams that can deliver superior results. According to the survey, 74% of organizations acknowledge that mobility programs contribute to building diverse and inclusive teams, which are proven to outperform homogeneous ones. By fostering collaboration and cross-cultural understanding, mobility cultivates a workforce that thrives on diversity and harnesses the collective strengths of its members.

Driving Employee Engagement and Retention: In today's talent-centric landscape, employee engagement and retention are top priorities for organizations seeking to maintain a competitive edge. The survey underscores the correlation between talent mobility and employee satisfaction, with 63% of organizations reporting that mobility programs have a positive impact on employee retention. By offering opportunities for career development, skill enhancement, and personal growth, mobility programs demonstrate a commitment to investing in employees' long-term success, fostering loyalty and commitment.

Mitigating Talent Shortages: As organizations grapple with talent shortages in critical skill areas, talent mobility emerges as a strategic solution for bridging the gap. The survey reveals that 72% of organizations use mobility programs to address talent shortages, deploying employees to locations or roles where their skills are most needed. By leveraging internal talent pools and promoting a culture of internal mobility, organizations can mitigate talent shortages, reduce recruitment costs, and retain institutional knowledge.

The EY Mobility Reimagined Survey results strongly align with ATMA’s belief that talent mobility is a crucial driver of organizational performance and competitiveness.  We strongly recommend that organizations review the full report, particularly the five actions to drive an evolved mobility function, and consider engaging with ATMA for specialized services.

Organizations that responded to a survey were assessed based on their mobility functions and were ranked as effective, emerging, or evolved. According to the survey, 30% of respondents from Asia were at the "evolved" level, similar to the Americas and higher than EMEA's 20%. These results further emphasize the importance of engaging with ATMA – a not-for-profit organization that aims to enhance talent mobility innovation and development in Asia. HR and Talent Mobility leaders require specialized services and programs to navigate their organizations through these rapidly changing times.

On April 29th, the Atma ESG event was held at Schneider Electric's flagship facility, bringing together experts from Schneider Electric, EY and Graebel to discuss the growing importance of sustainability in global mobility programs. The event provided valuable insights into the challenges and opportunities organizations face when integrating ESG strategies into their mobility practices.

The event comprised 3 discussions led by Stephen Park, Sanjala Hari and Alister Stewart of Schneider Electric, while Tammy Allman and Monique Dawson from EY shared their expertise on sustainability tax and the findings from the recent EY mobility survey. Calvin Chin represented Graebel and provided an insightful update on Graebel’s sustainability journey.

Top 10 Takeaways

• 1.     Sustainability is becoming a core focus for organizations, with ambitious targets and supplier engagement.
• 2.     Global mobility plays a key role in driving sustainability initiatives, managing carbon footprint, and promoting sustainable relocation practices, especially those in carbon-intensive areas such as household goods shipments and business travel.
• 3.     Transparency and data collection are essential for identifying vulnerabilities, improving processes and collaborating with suppliers across the organization’s value chain.
• 4.     Integrating ESG strategies into global mobility programs requires a holistic approach, addressing regulatory developments, DEI, environmental, social, and employee value.
• 5.     Collaboration and knowledge sharing across the mobility industry are needed for driving positive change and shaping the future of sustainable mobility practices.
• 6.     Schneider Electric aims to engage 50% of its suppliers to reduce emissions by 2025 and become carbon neutral by 2040 across the entire supply chain.
• 7.     While many organizations have an ESG strategy, only around a third have actively engaged global mobility in focusing on ESG within their programs, according to EY.
• 8.     Adopting a carrot-and-stick approach to obtain data from suppliers can help. incentivize them to provide necessary information while setting clear expectations and consequences for non-compliance.
• 9.     Graebel's ESG journey serves as a role model, incorporating both long and short-term goals such as commitment to the Climate Pledge and aiming for net-zero emissions.
• 10.  Events like the ATMA ESG event provide a platform for discussing best practices and challenges whilst enabling collaboration and knowledge sharing to drive positive change in the industry.

Best Practice Sharing from Schneider Electric

Sanjala Hari, representing Schneider Electric's sustainability business, emphasized that sustainability is part of the company's DNA. She highlighted Schneider's commitment to engaging 50% of its suppliers to reduce their emissions by 2025 and to become carbon neutral by 2040 across the entire supply chain. Hari also mentioned that Schneider Electric has set targets to reduce waste and water intensity, with a primary focus on carbon and energy due to the nature of its business.

Schneider Electric's sustainability efforts are not limited to its internal operations. The company also supports its vendors and clients in achieving their sustainability goals. Hari introduced Schneider's three-pillar approach to sustainability: strategize, digitize, and decarbonize. Schneider’s approach is to also measure emissions, set targets and create roadmaps, whilst providing digital solutions for data management and decarbonization.

The Schneider Electric team shared their own experiences in implementing sustainability practices within their organization. Stephen Park discussed the company's global hub strategy, which aims to reduce the carbon footprint of employee relocation by strategically placing talent in key locations. Alister Stewart highlighted the importance of embedding sustainability into the company's culture and decision-making processes, from hiring practices to supplier selection.

EY on Sustainability Tax

Tammy Allman highlighted the increasing need for transparency across the entire value chain, particularly in areas such as DEI. She emphasized the importance of accessing data across the supply chain to identify vulnerabilities and address them proactively. While this may lead to increased costs, Allman stressed that individual country landscapes differ, and organizations must navigate these complexities to achieve their sustainability goals. She posed a critical question to the audience: "Does your organization have the right capabilities and responsibilities to deliver your sustainability goals?"

Monique Dawson referenced the EY mobility survey, which revealed that while 77% of organizations report having an ESG strategy, only 35% have actively engaged global mobility in focusing on ESG within their programs. The survey also identified the top ways in which mobility is helping to drive sustainability, including managing carbon footprint, contributing to organizational sustainability targets, and promoting sustainable transport.

Dawson discussed the key trends shaping the future of sustainable mobility, such as regulatory developments, diversity and inclusion, environmental impact, social license to operate, and employee value proposition. She emphasized the importance of encouraging partnerships, measuring the carbon footprint of each location, and quantifying scope 3 emissions to drive progress in sustainability.

Graebel’s Sustainability Update

The event also featured a presentation by Calvin Chin from Graebel who shared details on Graebel's ESG journey, emphasizing their long-term commitment to the Climate Pledge and their efforts to reduce carbon intensity. Graebel aims to achieve net-zero emissions for scopes 1,2, and 3 by 2040. Chin also discussed Graebel's initiatives, such as the Graebel Sustainability Partner Program, which engages suppliers in adopting best practices for sustainability.

Against a backdrop of changing regulations and different stages of companies on their respective ESG journeys, the ATMA ESG event provided a platform for mobility industry leaders and team members to share ESG best practices, discuss challenges and explore solutions to drive sustainability in global mobility programs. As organizations increasingly recognize the importance of ESG factors in their operations, events like these are key in enabling collaboration, knowledge sharing and driving positive change in the industry.

Sustainability and mobility are intertwined aspects of modern business operations that demand attention and action. In a recent discussion, experts delved into various facets of sustainability, including definitions, frameworks, and practical strategies. Here are the top 10 takeaways:

1. Understanding Sustainability:

Sustainability, as defined by the Bruntland Report, is about meeting present needs without compromising future generations' ability to meet their own needs. However, the term has become overused and diluted over time, potentially undermining efforts to address core sustainability challenges.

2. Environmental, Social, and Governance (ESG) Frameworks:

ESG frameworks provide standards for socially conscious investors and businesses, focusing on environmental, social, and governance pillars. These standards aim to assess organizational practices beyond mere profit considerations holistically.

3. Sustainable Development Goals (SDGs):

The SDGs, established by the United Nations, offer a comprehensive framework for addressing global challenges by 2030. They cover 17 goals with 247 separate indicators, emphasizing the importance of people across various sustainability dimensions.

4. Overcoming Terminology Challenges:

Navigating sustainability terminology, including ESG, CSR (Corporate Social Responsibility), and SDGs, can be daunting. However, recognizing the overlap between these concepts and anchoring actions to the core principle of sustainability can provide clarity.

5. Urgency of Climate Action:

The escalating impacts of climate change, evidenced by record temperatures and extreme weather events, underscore the urgent need for robust climate action across industries. Businesses must prioritize climate resilience and mitigation strategies.

6. Environmental Risks for Businesses:

Senior business leaders recognize environmental risks, including extreme weather events and pollution, as significant concerns over the next decade. These risks necessitate proactive measures to mitigate environmental impacts and ensure long-term sustainability.

7. Regulatory Landscape:

Environmental and ESG regulations, often called the "alphabet soup," pose challenges for businesses due to their complexity and jurisdictional variations. However, emerging standards, such as those under the International Financial Reporting Standards (IFRS), provide more straightforward guidance for environmental disclosures and reporting.

8. Scope of Emissions:

Businesses are increasingly considering emissions across all three scopes—direct (Scope 1), indirect (Scope 2), and other indirect emissions (Scope 3). Addressing emissions comprehensively requires focusing on major contributors, such as transportation and supply chains.

9. Carbon Reduction Strategies:

Decarbonization efforts, particularly in international mobility, offer significant opportunities for reducing carbon footprints. Employing greener alternatives, optimizing relocation processes, and leveraging digital solutions can substantially reduce emissions.

10. Integration with Business Strategy:

Aligning mobility strategies with broader business goals, such as sustainability and diversity, fosters a holistic approach to talent management. By embedding sustainability considerations into decision-making processes and policies, organizations can drive positive environmental and social impact while achieving business objectives.

ATMA Members can find the webinar recording in the Members Resources section.

The meet up took place in Singapore and was attended by a group of 18 talent mobility professionals.  A mixture of networking and education, the conversations focused around ESG.

Some of the topics discussed:

• Learnings from Silverdoor about their carbon tracking of properties for clients, a big step in ensuring reporting requirements are met by corporations.
• Interest from other attendees to learn more about sustainability and how we can apply sustainable goals within the industry.
• Sean shared upcoming plans from the ESG committee and how members can get involved

Future dates for Singapore meet-ups include March 14^th (evening), April 11 (breakfast) and Monday May 13^th (evening).

Look for more information soon on the Singapore events as well as more events in China and India.

A post from our ESG Committee.

Across bustling Asian cities, heritage practices hold strong even amidst modern city lifestyles. Could this juxtaposition between local traditions and contemporary living be the key to sustainability for APAC’s serviced apartments?

Sustainability has become imperative for the serviced apartment sector. As a point of reference, the Sustainable Hospitality Alliance outlines that for the industry to align with the Paris Agreement's emissions targets, carbon emissions per hotel room need a 66% reduction by 2030 and a 90% reduction by 2050[1]. This indicates the importance of preventing the sector's projected growth from directly increasing overall carbon emissions. However, there are many more complexities to consider.

As Ms Beh Siew Kim, Chief Financial & Sustainability Officer, Lodging, CapitaLand Investment and Managing Director, Japan and Korea, The Ascott Limited (Ascott) points out; “Profitability and sustainability are often deemed as competing priorities, but in fact, they are complementary priorities which go hand-in-hand. A key challenge therefore lies in shifting people’s mindsets, from regarding sustainability as a cost, to viewing it as a window of opportunity to drive climate action.” This shift becomes increasingly pertinent considering the evolving ESG landscape and cultural nuances of the APAC serviced apartment sector.

APAC’s Diverse Serviced Apartment Industry

APAC’s serviced apartment industry increasingly faces rising consciousness amongst guests, corporate sustainability supplier requirements and climate change impacts on its operations. However, sustainability strategies cannot take a one-size-fits-all approach. The APAC region faces nuanced sustainability challenges driven by its vast geographical spread, infrastructure gaps, local climate and increasing operating costs.

For instance, in Singapore, sustainability initiatives differ widely between larger established players surrounded by greenery and newer boutique properties in the downtown area. In addition, co-living spaces have emerged as competitive alternatives to serviced apartments for assignees on lower budgets[6]. Zooming out across Asia Pacific, market structures and challenges vary dramatically. In Phnom Penh, a handful of global brands co-exist with local landlords operating informal furnished rentals, leading to fragmentation. Myanmar faces civil unrest, while Jakarta struggles with severe traffic congestion. Hong Kong contends with frequent typhoons amid a changing climate. Every location has diverse environmental, social, linguistic and cultural nuances.

Ascott is one of the serviced apartment providers that recognizes the importance of keeping local cultural values in mind. With an extensive network of in-market teams led by Regional and Country General Managers, they have the capability to localize in-market activations, particularly in geographies where universal policies do not apply.  Sharing best practices across regions is one technique that has delivered success within their APAC teams.

Market Differentiation Through ESG and Cultural Context

Blending traditional values and practices with modern ESG initiatives adds local relevance and meaningfulness to sustainability efforts across APAC. Integrating cultural contexts brings depth to realizing positive regional impact. Incorporating traditional values into ESG programs also makes them more relatable and effective. Realizing this requires proactive, continuous stakeholder engagement on all fronts to reshape mindsets.

For instance, the prevalent Asian principle of 'harmony with nature' aligns with sustainability goals, as does Japan’s 'mottainai' concept of regretting waste. Serviced apartments able to bridge localized variances through tailored initiatives aligned with cultural values stand to lead APAC’s sustainability progress. The path includes supporting not just environmental aims but also workers and communities. For example, Ascott’s commitments to education programs in Indonesia and a partnership with the WWF in Batangas, The Philippines, reflect these nuanced initiatives.

Enhancing Guest Experience through ESG

Prioritizing sustainability through the lens of cultural practices does not just benefit the environment - it can also enhance the guest experience. This was shown by Singapore's Treetops serviced apartments, where green initiatives significantly improved indoor air quality[2].  Serviced apartments in APAC that have embraced ESG initiatives often report higher guest satisfaction, owing to a growing preference for sustainable and responsible travel options. Features like energy-efficient lighting, water-saving fixtures, and locally sourced food reduce environmental impact and offer guests a unique, authentic experience. This duality of environmental responsibility and enriched guest experience can drive business growth and reduce costs.

As a Global Sustainable Tourism Council (GSTC) member, Ascott aligns its practices with benchmark sustainability goals. As Beh Siew Kim noted, “Responsible business among consumers has further translated into determining criteria when it comes to selecting partners. On the corporate front, we have seen a rising importance placed on selecting corporate partners who can demonstrate clear ESG practices.”

Evolving Regulation and Governance

Changes in the governance space may also accelerate ESG practices in the APAC region. There are clear indications that fragmentation in sustainability reporting will give way to consolidated standards for transparency and performance tracking. Guided by major bodies including the International Financial Reporting Standards (IFRS), the Global Reporting Initiative (GRI), and the International Sustainability Standards Board (ISSB), companies can expect aligned directives for communicating their eco-conscious policies, targets, and impacts to stakeholders. As leaders navigate this transition in sustainability measurement and disclosure, players understanding both universal guidelines and location-specific requirements will be able to transform reporting into a mechanism for strategic advantage.

Looking Forward: The Future of Sustainability in APAC’s Serviced Apartments

APAC’s serviced apartments are evolving towards prioritizing sustainability, influenced by economic trends, market demands, and technology integration. Future strategies may include smart technologies for efficient resource management, carbon offsetting initiatives, energy management and waste reduction. Other potential approaches are increased guest participation in sustainability and enhanced partnering with local artisans, suppliers, and waste reduction initiatives. As newer properties come online, new methods for offsetting or reducing embodied carbon and other initiatives are expected[5].

Conclusion

In Asia Pacific's diverse serviced apartment sector, sustainability necessitates balancing global consistency with regional relevance. While universal environmental and social priorities apply, embedding sustainability requires including location-specific cultural and traditional practices. The path ahead is for players to keep sustainability central to offerings through smart technology, carbon accounting, guest engagement and local partnerships. With consumers becoming more conscious of their choices, they are more likely to support businesses that align with their values.

With the regulatory landscape driving transparency through increasingly unified reporting frameworks, the need for robust data, transparency and clarity will only increase. Although the road to decarbonization is long and complex, cross-sector collaboration blends tradition with new solutions. Cultural insight might be the missing link for ESG and enhanced guest experiences that pave the way to scalable climate action and nurturing APAC’s local communities.

This article originally appeared in the Global Serviced Apartment Industry Report APAC Q4 2023, available at https://www.ariosi.com/gsair

A post from our ESG Committee.

A seismic shift has occurred in the way companies view sustainability. In a 2022 WeWork study of 850 companies worldwide, 80% said they plan to increase their investments in sustainability. In large corporations, sustainability is no longer just about reducing carbon footprint or implementing environmentally friendly practices; sustainability is now being integrated into every aspect of business operations, including human resource management.

What is Sustainable HR Practice?

According to Robin Kramar, writing in the Asia Pacific Journal of Human Resources, Sustainable Human Resource Management (SHRM) has been developing for over 15 years, expanding on strategic HRM. It includes wide organizational objectives across various domains and is not restricted to only business aims. Most critically, SHRM connects HR and Talent Management with sustainability. This viewpoint acknowledges the significance of incorporating sustainability into organizations and strives to accomplish positive economic, social, human and environmental results in the long and short term.

A Shift in HR Practices

A 2023 study by Deloitte revealed that corporate sustainability efforts have evolved beyond public relations or brand defence. Companies now prioritize driving meaningful outcomes through a human-centred approach. This involves purpose-driven incentives across the organization, developing technical and soft skills, improving the employee experience, and designing for human sustainability. Sustainability is becoming ingrained in the cultural fabric of many enterprises.

Within this landscape, sustainable human resource management practices are vital to how companies treat employees fairly, ethically, and caringly. This covers critical areas like well-being, development, retention, and more. Leading organizations also extend their integrated HR and sustainability initiatives across their broader ecosystem - including partners, suppliers, clients, and local communities. The human element is essential for implementing corporate sustainability in a meaningful way.

Drivers for Sustainable HR Practices

Recent shifts in the global employment landscape have forced organizations to reevaluate how they approach human resources. Work-related stress continues to be high with The Business Times highlighting that 52% of Singaporeans feel “stress” from their work. According to SHRM, trends such as mental health concerns, employee burnout, disengagement, and the Great Resignation show the need for sustainable HR practices. According to Tech Target and The U.S. Bureau of Labor Statistics, between April 2021 and April 2022, 71.6 million people separated from their jobs, or an average of 3.98 million people quit each month in the US.

According to Deloitte’s 2021 survey, 44% of millennials and 49% of Gen Z rely on their ethics in determining the type of work and companies they would join. From Baby Boomers to Gen Z, today's workforce increasingly seeks meaningful work, collaboration, flexibility, diversity, equity, inclusion, and an open relationship with their managers. This also means that managers themselves must evolve into mentors and coaches. In addition, challenges such as ongoing talent wars and the rise of AI, are reshaping the skillsets needed in the workforce.

An article by McKinsey emphasizes the transformative role of HR in driving sustainable change in the workplace, especially in the wake of the COVID-19 pandemic. McKinsey highlights that traditional hierarchical and bureaucratic management systems are becoming obsolete. Newer practices involve a culture of being dynamic, flexible and responsive model of HR practices. Central to this transformation is the focus on three key areas: identity, agility, and scalability.

HR professionals are therefore central in shaping and delivering their organisations' ESG strategy. This can include developing practical environmental policies for employees, leading diversity and inclusion initiatives, and ensuring governance mechanisms are in place to drive accountability and transparency. HR's involvement is important for aligning the business with its purpose and values, leading to better investor and employee relations and reduced risk.

Increasing External Pressure on HR Practices

Broader factors beyond internal organizational dynamics increasingly influence the shifting HR landscape. Many multinational corporations (MNCs) are actively reshaping their corporate values to include ESG practices, a change partly driven by investor influence.

A significant example of this trend comes from Gartner's 2021 data, revealing that 85% of investors consider ESG factors in their capital allocation decisions. This data highlights MNCs' substantial pressure to satisfy investor demands and maintain an image aligned with sustainable practices.

These external pressures, coupled with internal trends like generational shifts in the workforce and a growing focus on mental health, are compelling companies to reassess and evolve their HR strategies. This evolution in HR is not solely a reaction to external demands but also part of a strategic response to changing global business, societal and more significantly, investor pressure.

Benefits of Sustainable HR Practices

Implementing sustainable or green HR practices involves both short-term and long-term considerations. The cost of doing nothing is high, as is the cost of burnout, a damaged reputation, lower productivity, accidents and sickness. By avoiding knowledge loss through high retention rates and nurturing a talent pool, businesses can reduce costs and enhance customer satisfaction, loyalty, engagement, and innovation. According to a study by McKinsey, sustainable HR practices can lower capital costs due to reduced turnover and mitigate environmental risks. The benefits of sustainable HR practices are multiple:

Adapted from: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7470767/

Implementing Changes for Sustainable HR

Implementing a sustainable HR strategy is more than a strategic shift. Sustainable HR practices are a series of steps towards aligning the organization with the evolving demands of the modern workforce and a broader societal push towards environmental and social responsibility. To navigate this transition successfully, a clear plan and defined steps can help meet these goals. Each planned stage should be measurable where possible and focused on specific outcomes.

To begin implementing changes for sustainable HR, it is important to first understand the company’s values and what is important as a company relating to the sustainability topic. Organizations may start by identifying key areas needing focus, such as mental health, recruitment practices, or rewards systems. 

Secondly, employee involvement and a phased plan with small initial steps are important to consider. Leading people compassionately through changes, considering risks and costs of non-implementation, focusing on the entire employee life cycle, and meeting evolving generational expectations are also significant.

Additional areas to address include enhancing employee engagement, communication, recognition, and celebrating progress. Organizations can lay the foundation for impactful and lasting adoption of sustainable HR practices by taking a phased approach with early wins.

Sustainable HR in Practice

An increasing number of companies are embracing the role of sustainable human resource (HR) practices in fostering an inclusive, productive, and environmentally conscious workplace. This trend is exemplified by the innovative approaches of several leading firms across various industries. Here are just some of companies exemplifying sustainable HR in practice:

●       BASF, a European multinational chemical company, has used tools like smartPlan to simulate realistic diversity scenarios, helping to increase the diversity share within the company and providing global sociocultural benchmarks for diversity. This approach integrates sustainability with diversity and inclusion initiatives.

●       Novo Nordisk, a European Pharmaceutical company have recognized the prevalence of mental health issues post-pandemic place a strong emphasis on sustainability and employee well-being. The company has developed a strong emphasis on initiatives to support employee health, for example physical fitness, mental health, and work-life balance. This has led to improved employee satisfaction, increased productivity, and reduced healthcare costs for the company.

●       Patagonia, a purpose-driven apparel company is renowned for its ethical treatment of workers and sustainable HR practices. Patagonia's commitment to employee well-being and sustainability has resulted in high employee retention rates and a positive brand reputation. The company has a very low staff turnover rate of only 4%.

●       Interface, a modular flooring company is known for its commitment to environmentally sustainable practices. It implements sustainable HR in the form of increased employee education among other practices. This has led to improved job satisfaction and retention and a corporate culture of innovation and continuous improvement.

Tools and Resources

Using the right tools and resources can help transition the move towards more sustainable HR. There are many tools and models available.

●       The Kubler-Ross Change Curve provides a guide for understanding and managing the emotional aspects of organizational change.

●       EcoVadis provides comprehensive, actionable steps that translate into impactful organizational change. It can also be useful for assessing and improving sustainability performance, for example in areas such as supply chain management. Equipped with the right tools for their needs, organizations can be more prepared to approach sustainable human resource management.

●       Gathering internal HR data: This approach will help understand the narrative of change within the business and during the execution of employee communication strategies. Key HR metrics serve as important examples. Attrition and sickness rates, reasons for job offer rejections or acceptances, and insights from employee surveys and feedback all contribute to a more detailed understanding of the organization. Such data will offer a more defined understanding of the areas in sustainable HR that necessitate concentrated attention and prioritization. This also aids the alignment and approach of HR strategies.

●       Communicate: Start small and share quick wins. Ongoing communication with employees and the business is a major key to success.

●       Sustainability reporting understanding: Tools like the GRI (Global Reporting Initiative) framework help develop companies' comprehensive sustainability reports and create a deeper understanding of sustainability and its impact on business. These reports are also key to transparently communicating your organization's sustainability performance to stakeholders.

●       Learning and development: Incorporate e-learning platforms such as LinkedIn Learning or Coursera, offering courses on sustainability and ethical business practices. This helps in upskilling teams to be more aligned with sustainable practices.

Conclusion

HR can potentially lead the way for change in companies and society by incorporating green practices into areas such as hiring, employee involvement, operations, and the employee lifecycle. Sustainable HR improves morale, health, accountability, and retention. It meets the needs of new talent seeking balance and a sense of purpose. Moving to sustainable HR needs support from multiple stakeholders, resources, and overall buy-in. Although there may be some challenges along the way, sustainable HR creates value for all employees. Companies can potentially enhance their effectiveness by integrating HR and sustainability at their core, focusing on continuous improvement through small, measurable steps. Ultimately, sustainable HR practices nurture any company's true assets: its people.

Further Reading and References

Asia Pacific Journal of Human Resources. (2022). Sustainable Human Resources Management: 6 Defining Characteristics. Asia Pacific Journal of Human Resources. https://doi.org/10.1111/1744-7941.12321

CIPD - The Professional Body for HR and People Development (n.d.). "Environmental sustainability - Dassault Systèmes." Available at: https://www.cipd.org/en/knowledge/case-studies/environmental-sustainability-dassault-systemes/

McKinsey & Company (2021). "The New Possible: How HR Can Help Build the Organization of the Future." Available at: https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-new-possible-how-hr-can-help-build-the-organization-of-the-future

McKinsey & Company (2023). "The State of Organizations 2023." Available at: https://www.mckinsey.com/~/media/mckinsey/business%20functions/people%20and%20organizational%20performance/our%20insights/the%20state%20of%20organizations%202023/the-state-of-organizations-2023.pdf

PubMed Central (2020). "The impact of COVID-19 on the mental health of healthcare professionals." Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7470767/

ScienceDirect (2018). "Risk management for electric power systems: A focus on power transmission and distribution." Available at: https://www.sciencedirect.com/science/article/abs/pii/S0921344918303719

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