BY GRACE OMOTOLA
What truly makes a company valuable in today’s economy? It lies not in its physical assets nor in the financial statement, but in the ingenuity, resilience, and shared purpose of its people. Across industries and regions, investors, regulators, customers, and employees are sending a clear message: how an organisation treats its people is as vital as how it treats the planet.
The World’s Largest Asset Managers 2020 compiled by Pensions and Investments and The Thinking Ahead Institute reveals that over eight out of ten consumers worldwide want CEOs to be at the frontline when dealing with society. The leading asset managers in the world now pay extra attention to the way businesses relate purpose, diversity, equity, inclusion (DEI) and ESG. This is the same point of view by employees: 58 percent consider the social and environmental responsibilities of a company when choosing where to work, and those who perceive a sense of purpose in their work are three times more likely to remain and 1.4 times more engaged.
According to a Willis Towers Watson study, 51 percent of S&P 500 companies are currently incorporating the ESG metrics into executive incentive plans, usually relating to such aspects as succession planning, DEI, engagement of employees and corporate culture. This will be the turning point: people’s performance is now evaluated alongside financial performance.
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There is also an increasing trend of making this reporting more coherent. The decision of the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) to form a new entity called Value Reporting Foundation indicates that there is an increasing consensus that data on workforce practices, including learning investments, diversity measures and well-being, should be included in ESG disclosures and standards.
This realisation is transforming how leaders perceive Environmental, Social, and Governance (ESG) performance. Once focused mainly on reducing carbon footprints and improving governance, ESG is evolving to recognise human capital, the people driving innovation, decision-making, and customer experience, as the foundation of sustainable success. The International Sustainability Standards Board (ISSB) now defines ESG as a framework for understanding how organisations manage sustainability-related risks and opportunities, including those tied to their workforce.
This article explores how sustainable talent strategies link ESG to human capital, drawing on case studies, best practices, challenges, and the evolving future of ESG-driven people strategies. It makes one thing clear: the future of sustainability begins with people.
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The ESG Human Capital Nexus
In simple terms, the “ESG-Human Capital Nexus” refers to the connection between a company’s sustainability practices (ESG) and the value of its people. Organisations are increasingly recognising that employees are not just resources—they are the drivers of innovation, ethical practices, and long-term growth
The social aspect of ESG (Environmental, Social, and Governance) is often thought about in broad terms, such as how companies affect communities, respect human rights, or manage labour practices in their supply chains. However, the centre of attention of the “Social” pillar is becoming increasingly internal: the workforce, talent development, and how companies treat their people. This change is vital in that individuals are not an expense of running a business, they are a tangible asset, a lever of risk, and a driver of opportunity.
Various research associates the quality of human capital and diversity with ESG performance and business success. To illustrate, it is reported that more diversified companies (in terms of gender and cultural differences) are more innovative: 78-83 percent of the global surveyed executives found that increasing diversity in terms of age, culture, and job role increases up to 83. (HEF Journal, 2024)
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On the same note, according to a report compiled by ESG Dive, organisations with more gender-balanced work performances performed better than those with a less-balanced work division by about 29% per year from 2013-2022. (ESG Dive, 2024)
To business owners and personnel in human resources, this shows that their investment in diversity and inclusion is not about compliance, but a source of strategic performance and innovativeness.
Beyond diversity, human capital metrics like investment in training, staff retention, and person upskilling are increasingly connected to the ESG performance. The study of S&P 500 companies revealed that the effectiveness of human capital management, including productivity, training, diversity, pay equity, and benefits, has been significantly positively related to ESG performance. (Nature Portfolio, 2024)
Investor and Regulatory Focus
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United States- SEC Disclosure of Human Capital.
In 2020, the U.S. Securities and Exchange Commission (SEC) officially adopted the materiality of human capital and made an amendment to the disclosure regulation (Item 101) of Regulatory S-K) to make companies report their human capital resources and management practices. (Bloomberg Law, 2020)
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In 2022, the Investor Advisory Committee at the SEC broadened this scope and requested more weekly reports to introduce the concept of human capital management, workforce demographics, and ESG metrics. (SEC, 2022)
More recently, the pressure of investors has compelled organisations to leave behind qualitative stories and quantitative measures of the workforce, including turnover, training investment, and pay equity. (Sustainability Directory, 2023)
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This implies that, to business owners and HR leaders, they can align HR, finance, and Sustainability teams to make robust, data-driven human capital disclosures.
European Union – Sustainability Directives.
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In the development of global sustainability reporting, the Corporate Sustainability Reporting Directive (CSRD), which becomes effective in 2024, becomes a significant change. It requires specific information on workforce metrics, including training and diversity as well as working conditions, strengthening human capital as one of the areas of performance sustainability.
Aligning the local human capital strategy and the EU-compliant ESGs is now critical to the HR leaders of global organisations.
Africa – Surging Momentum of ESG Reporting.
ESG frameworks are fast evolving in Africa. The South African code of Kings IV of Nairobi Securities Exchange and the South Africans are similar concepts that promote ethical leadership, social responsibility, and well-being of the workforce as governance principles.
Studies conducted in sub-Saharan Africa have shown that companies that have effective governance systems (e.g., diversity in their board compositions, board leadership accountability) offer more ESG disclosure. (Springer, 2025)
Nevertheless, a recent evaluation of companies in the Johannesburg Stock Exchange observed that though human capital disclosure is increasingly on the rise, it has yet to be powerfully reflected on the market value, which highlights the need for clearer standards and powerful connections between workforce statistics and business performance. (Acadlore, 2025)
To African business leaders, this puts into perspective the need for the substance over symbolism in ESG reporting; meaningful, evidence-based disclosures of human capital are required to instil investor confidence.
Ultimately, sustainable talent strategies are not a compliance activity but the foundation of future-fit organisations, the ones that connect purpose and people with performance under a single sustainable vision. Human capital contributes about 65 percent of the world’s wealth, as the World Economic Forum reminds us; thus, people are seen as the real currency of sustainability.
The Three Key Pillars of Sustainable Talent Strategies
To integrate human capital development in an ESG strategy, it is important to have a knowledge of the three dimensions of ESG, which are Environmental, Social and Governance. The pillars provide business and HR leaders with the possibility to integrate people practices with a sustainability agenda. They work together to create a roadmap towards creating innovative, responsible and resilient organisations.
Environmental Pillar
Carbon emission and the use of resources is usually linked with the environmental aspect of ESG. But the actual driver of environmental development is people, their talents, principles, and imagination. The approach to promoting sustainability among organisations includes the creation of green capabilities, promotion of innovation, and the creation of cultures that appreciate the importance of environmental responsibility.
Building Green Workforce Skills and Green Conscious Cultures.
Studies on Green Human Resource Management show that sustainability-driven cultures emerge when businesses embed environmental thinking into recruitment, training, and leadership development processes. Such organisations naturally encourage employees to adopt eco-conscious habits and embrace green practices (Nature, 2025). Similarly, research reveals that implementing green work-life balance programs not only enhances sustainability performance but also improves employee retention (MDPI, 2024).
For business and HR leaders, this means intentionally building future-ready green skills—such as sustainability literacy, knowledge of renewable energy, and circular economy thinking—into job descriptions, training programs, and leadership development. Organisations should also reward employees who champion environmental goals and actively track measurable outcomes, including the number of staff trained in sustainability and those participating in green initiatives.
The Social Pillar
The Social Pillar focuses on how businesses impact people, while the Environmental Pillar addresses their effect on the planet. Within ESG, this pillar highlights the human side of organisational responsibility—covering diversity, inclusion, fair labour practices, and employee well-being.
Diversity, equity, and inclusion practices
According to PwC’s 2024 report, nearly 50% of consumers expect organisations to actively promote diversity, equity, inclusion, fair pay, and equal opportunities. Similarly, Deloitte’s 2024 Human Capital Trends Report found that inclusive organisations tend to be more innovative, resilient, and profitable. This means leaders must go beyond representation to measure inclusion, belonging, and equity in career progression. Leadership accountability should be directly tied to inclusion goals and business performance—positioning inclusion not just as a moral responsibility, but also as a strategic business advantage.
Work-Life Balance, Mental Health, and Wellness
Organisations are increasingly recognising that employee well-being is a key part of sustainability. Deloitte (2024) reported that companies prioritising employee wellness achieved a 2.2% higher five-year return on equity and produced 50% lower CO₂ emissions per dollar of revenue—proving that business performance and employee care can coexist. To sustain this, companies must integrate wellness into daily operations, not just policies, ensuring flexibility that supports mental health. Wellness programs should address holistic needs—physical, emotional, and psychological—and organisations should track engagement, absenteeism, and retention as well-being indicators in their ESG reporting.
Fair Pay, Work Ethics, and Customer Service
Fair pay and ethical labour practices are now central to ESG evaluation. Nature Portfolio (2024) revealed that organisations excelling in pay equity, employee benefits, and continuous training also outperform others in overall ESG performance. This reinforces that ethical treatment of employees isn’t just socially responsible—it’s a measurable driver of organisational success and reputation.
Governance Pillar
Governance can be said to be the framework that makes sure that the ESG principles are implemented with integrity. It explains the way in which organisations guide, quantify and maintain improvement. In the case of talent strategy, governance implies transparency, accountability and ethics in decision making.
Transparent HR Policies and Leadership Accountability.
Good governance begins with leadership. Research shows that organisations with strong management practices often integrate human capital management into robust governance structures. creating a link between CEO leadership, tenure, and stronger ESG performance (Nature, 2024). To strengthen this connection, boards must take accountability for human capital and ESG outcomes, ensuring that ethical and sustainability commitments are clearly embedded within HR policies. Additionally, organisations should publicly share key workforce metrics such as investments in employee training, diversity in leadership, and levels of engagement to foster transparency and reinforce a culture of responsible governance.
Case Studies and Best Practices
The world’s most resilient organisations are proving that sustainability, culture, and people strategy aren’t separate conversations. They’re one and the same.
Microsoft offers one of the clearest examples of how sustainability can live inside a company’s talent system. Every leader’s bonus is tied to progress on diversity, inclusion, and carbon reduction goals. That means everyone, from senior executives to managers, carries part of the sustainability story in their performance goals. It’s not just a project; it’s part of how people grow their careers.
At Unilever, sustainability is inseparable from identity. The company’s Sustainable Living Plan invites employees at every level to find ways to make their work more responsible — from sourcing ethically to reducing waste. Employees aren’t just contributors to the company’s success; they’re co-authors of its social impact. The result is a culture where sustainability isn’t a buzzword but a daily practice.
In Africa, sustainability is taking shape in ways that reflect both global standards and local realities. Safaricom, for example, has made “Transforming Lives” its core purpose. Beyond providing connectivity, the company invests in renewable energy, local innovation, and community empowerment. Employees see their roles as part of a much larger mission — helping build a more inclusive digital Africa.
The Africa Finance Corporation (AFC) tells another powerful story. Across 36 countries, AFC’s projects have added over $50 billion to GDP, created 7 million jobs, and avoided 8.8 million tons of CO₂ emissions annually. But the story goes deeper: AFC has built a diverse, Pan-African team representing 25 nationalities, creating a work culture driven by integrity, collaboration, and purpose. Their approach proves that ESG isn’t just about infrastructure or environment — it’s about people who make growth sustainable.
Similarly, Nigerian banks such as Access Bank and Zenith Bank are leading the ESG movement through transparency and accountability. They link executive performance to sustainability targets and integrate ESG into their reporting systems. This shift attracts young professionals who want more than a paycheck; they want to work where their effort has meaning.
Challenges & Barriers
No transformation comes easy. Even with all the progress, organisations still face hurdles on the path to ESG integration.
1. Resistance to Change Cultures built on short-term performance often struggle to prioritise long-term sustainability. Many leaders say the right things about ESG but don’t always model them. Without leadership alignment and visible commitment, sustainability can feel optional instead of essential.
2. The Cost Mindset Sustainability initiatives from green upskilling to employee wellness often look like expenses on paper. But the smartest organisations view them as investments in resilience. The real shift is mental: moving from short-term ROI to long-term value creation, where doing good and doing well reinforce each other.
3. Data Gaps and Infrastructure Challenges Across emerging markets, the lack of reliable ESG data can make it difficult to measure progress. Companies like AFC and Safaricom are exceptions because they’ve invested in data transparency. For many others, the absence of standardised reporting and digital tools makes ESG progress harder to track and harder to prove.
Future of ESG-Linked Talent Strategies:
The companies that will thrive in the next decade are those that understand that sustainability, innovation, and human capital are inseparable. ESG is evolving from a compliance exercise into a strategic lever for innovation and competitiveness. Forward-thinking organisations are using ESG-linked talent strategies to uncover new opportunities: developing green skills, fostering inclusive teams that drive creative solutions, and embedding purpose into every level of the workforce. In this new paradigm, sustainability is not a department; it’s a mindset that shapes decision-making, talent investment, and business strategy.
Human-Centered Organisations
The next wave of sustainable growth belongs to organisations that put humans at the centre. This means designing workplaces that nurture well-being, psychological safety, and equitable opportunity. Employees are no longer passive participants; they are co-creators of value. Companies that prioritise human experiences cultivate engagement, resilience, and a sense of ownership that translates directly into measurable ESG impact. A psychologically safe, empowered workforce becomes an unstoppable engine for creativity, problem-solving, and long-term performance.
HR as Strategic ESG Architect
HR leaders are emerging as strategic architects of ESG impact. Beyond administrative oversight, HR is now responsible for translating ESG vision into tangible talent outcomes: from recruitment strategies that prioritise diversity and inclusion, to learning programs that equip employees with future-ready skills, to performance systems that reward sustainable behaviours. HR sits at the intersection of people, purpose, and performance—ensuring that every talent decision amplifies both business and societal value.
Conclusion
Sustainable talent strategies are not just an HR initiative; they are the bridge between ESG ambition and real-world impact. Organisations that embed sustainability into culture, governance, and talent systems don’t just future-proof their workforce; they create lasting value for investors, customers, and society at large.
Africa stands at a pivotal moment. With a rapidly growing, dynamic workforce and emerging ESG frameworks, African organisations have a once-in-a-generation opportunity to leverage human capital for innovation, resilience, and inclusive growth. Those that succeed will align purpose with performance, demonstrating that ESG is not a compliance obligation; it is the blueprint for future-ready, competitive, and human-centred organisations.
Views expressed by contributors are strictly personal and not of TheCable.