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Your People Are Your ESG Strategy

The Numbers Don’t Lie – And They’ve Got Worse

CIPD data for 2024 shows the average UK employee took 9.4 sick days, nearly two full working weeks. That’s up from 7.8 days in 2023, and more than 60% above pre-COVID levels of 5.8 days. The trend is not a post-pandemic blip. It has embedded itself into the workplace experience.

The financial cost to business is substantial, but the more significant shift is what it signals. This is no longer a well-being issue sitting on the margins of the people agenda. It has become a core challenge for performance and cost management. Mental ill health is now the largest single driver of long-term absence, and CHX Performance’s neuroscience-grounded work points to emotional dysregulation, unmanaged feelings that go unaddressed, as the root cause of 80% of poor mental health at work. That’s not a welfare observation. It’s a performance data point.

Feelings Are Business Data. Most Organisations Are Ignoring Them

Most leadership development programmes focus on capabilities and skills – what leaders know and can do. CHX Performance asks a different question: Do your leaders have the capacity to be the leaders you need them to be?

Feelings, they argue, are biological signals – data telling us how well resourced we are to meet the demands we’re facing. Yet most organisations inadvertently encourage people to suppress or mask how they feel. The result is that the most important data in the system gets removed from the dataset, replaced by the energy cost of concealment. It’s a poor trade, and it shows up directly in performance, retention, and absence figures.

The starting point for any leader is recognising that the emotional environment they create is not a soft consideration – it is the operating system on which everything else runs.

The Five Things Every Employee Needs to Feel

At the core of CHX’s work is a deceptively simple framework. Humans are a social species with core biological needs. When those needs are met at work, engagement, trust, and discretionary effort follow naturally. When they aren’t, people disengage, burn out, or leave.

The five needs are certainty – clarity about direction and what’s within their control; inclusion – a genuine sense of belonging; autonomy – meaningful agency over how they work; attachment – connection to the people they work with and for; and equity – confidence that they are being treated fairly.

These are not HR concepts. They are biological imperatives with a direct, measurable effect on how people show up, perform, and stay. Leaders who approach their teams with these five needs at the front of how they operate are, in practical terms, putting the right data at the heart of how they run their business.

The Leadership Shadow You May Not Know You’re Casting

A leader who arrives stressed, underslept, or emotionally depleted doesn’t just underperform; they also undermine themselves. Their state biases how they perceive their team, distorts their decision-making, and creates a ripple of threat responses in the people around them. Disengagement, lost trust, reduced performance – these aren’t attitude problems. They are predictable biological responses to an environment that doesn’t feel safe.

This dynamic runs in both directions. The emotional state of team members shapes how they interpret leadership decisions and whether they feel engaged or threatened. Mood, as CHX frame it, is a critical data point for everyone in the team – not just those at the top.

Why Wellbeing Spend Without Environmental Change Is Compensation for Harm

For senior leaders reviewing their people investment, this is perhaps the sharpest challenge to sit with. Wellbeing programmes layered onto a damaging environment don’t address the problem – they offset it temporarily. The harm continues; the spend follows behind it.

The uncomfortable truth CHX consistently put to leadership teams is this: poor wellbeing in the workplace is not a pathological response to a great environment. It is a completely normal and predictable response to a pathological one. The right question to ask before the next wellbeing investment is not what programme to run – it’s what the environment is doing to people in the first place.

The S and G in ESG Are Performing Below Their Potential

The Social and Governance pillars are consistently underweighted in ESG strategy relative to Environmental. But the S – how a business affects its people – it is often not a reporting obligation. It is the operational foundation of everything else. Credible environmental commitments cannot be delivered without an engaged, stable, high-performing workforce. And that workforce cannot exist without governance structures that create the conditions for it.

On DEI specifically: initiatives that fail often do so not because the intent was wrong, but because they were layered onto environments where people don’t already feel safe, valued, or included. Equity and inclusion are biological needs that every person in an organisation has. Address the environment first, and the programmes land entirely differently.

What Forward-Thinking Leaders Are Doing Differently

Damien Stork offers an instructive example from CHX’s work. A senior HR leader responsible for DEI in an 85% male global engineering firm spent five years pushing her agenda with minimal traction before stepping away, exhausted. She moved to a different organisation into a role that wasn’t her first professional choice. Within months, she felt transformed. The work wasn’t different. The environment was.

The practical starting point CHX recommends for any organisation is to build a shared language and literacy around capacity and feelings – helping leaders understand what their people need to feel in order to perform, and giving them the tools to create that environment. Managing one’s own emotional state becomes a leadership responsibility, not a personal matter.

The Question Worth Taking Into Your Next Board Conversation

ESG reporting frameworks will continue to evolve. Regulatory requirements will tighten. Investor scrutiny of the S and G pillars will increase. But beneath the frameworks, the question that will differentiate high-performing organisations is more fundamental: are your people operating in an environment where they can bring their full capacity to work?

If the honest answer is no, the strategic priority is clear.

CHX Performance: CHX Performance works with senior leadership teams to build human sustainability – increasing people’s capacity to deliver against organisational goals in an increasingly complex world.

FuturePlus’ free one-hour ESG framework course gives leaders a practical foundation for strategy, from assessment through to goals and reporting. Start here.