We recently held the latest of our UK-China Legal Exchange events, as part of the 2025 themed series, 'Navigating Competing Priorities, Growing Your Business.' The series focuses on converting challenges into opportunities, bringing together industry leaders and experts to discuss the latest trends, legal updates, and best practices. This session addressed practical issues under the ESG umbrella and effective employee management to protect employee wellbeing. Here are our key takeaways from the event.
Upskill People and Legal Skills to Overcome Cultural Barriers
The importance of upskilling and cultural integration is emphasised in the latest report by the China Chamber of Commerce in the UK (CCCUK), which highlights the growing focus Chinese enterprises are placing on workforce investment. Upskilling employees is not just a strategic move but a necessity in today's rapidly evolving business landscape. Our discussion also underscored the persistent challenge of cultural differences. Misunderstandings, language barriers, and differing workplace expectations can all lead to business barriers, including allegations of bullying or harassment.
Enhance Employee Protection to Prevent Workplace Harassment
Regulatory and compliance requirements around employee management and harassment prevention have been steadily increasing. From October 2024, employers are under a new duty to take reasonable steps to prevent sexual harassment. To protect your business from damaging disputes, it is important to:
- Stay ahead of regulatory changes: Regularly update your knowledge on compliance requirements related to employee management and harassment prevention. Major changes to employment law are due to come into force next year, and businesses need to prepare for these changes.
- Invest in upskilling: Focus on legal training and cultural awareness programs to bridge gaps and foster a supportive work environment.
- Create a safe workplace: Implement policies and practices that actively prevent workplace harassment and ensure employees feel valued and protected.
Sexual harassment, and harassment more generally, can take many forms. The definition in the Equality Act 2010 emphasises that the impact on the victim is the key consideration – harassment does not need to be intentional to be unlawful. To reduce the risks of Employment Tribunal claims and regulatory enforcement action, employers should focus on the following areas:
- Ensure you are familiar with the EHRC (Office for Equality and Opportunity) guidance on preventing harassment, which sets out steps that employers are expected to take.
- Carry out a robust risk assessment to identify where harassment may occur in the business and what steps can be taken to reduce the risks.
- Ensure that there is a top-down commitment to stamping out harassment, including providing suitable training for staff and ensuring that complaints are handled effectively.
- Monitor outcomes for staff who raise complaints – a pattern of complainants leaving under settlement agreements may indicate a cultural and organisational problem.
Be aware that regulators (including the FCA) are increasingly seeing harassment and other forms of non-financial misconduct as evidence of poor governance and culture, and a lack of internal checks and balances.
Integrate ESG Strategies into Your Business Operations
The term ESG has become somewhat politicised and misunderstood, which is why there is an undoubted backlash against elements of ESG practice. However, ESG is better understood as a vital framework for assessing a business's environmental and social impact.
ESG represents the intersection of legislation and regulation with business purpose, attitudes, behavior, and culture. This includes addressing workplace harassment as part of the broader social responsibility to ensure a safe and respectful work environment. Implementing an effective ESG strategy is a journey that includes an assessment of the social and environmental impact of your business on its key stakeholders and a decision on how to manage the risks and opportunities that arise from that impact assessment.
An effective ESG strategy will consider the needs of business stakeholders, including clients, suppliers, investors, the workforce, and the wider community and environment, and determine in light of that assessment what is right for your business. All areas of business operations, including workplace policies and culture, are touched by ESG.
In considering your business's approach to ESG, it is important to:
- Understand ESG principles: Recognise the importance of the ESG regulatory and legislative framework that is most relevant to your business.
- Determine your ESG strategy: An ESG strategy will govern and manage the social and environmental impact that your business has on its stakeholders; it must be consistent with the purpose and values of your business.
- Embed ESG in your culture: Integrate the agreed ESG strategy into all elements of your business, including attitudes, behavior, and culture.
- Carry out compliance checks: Regularly review your adherence to regulatory frameworks and legislation.
- Do your due diligence: Thoroughly vet third parties to ensure they align with your ESG standards.
- Conduct internal audits: Continuously audit your business procedures, policies, and cultural adherence to identify areas for improvement.
- Investigate concerns: Address any issues related to ESG and employee management promptly and effectively.
The UK-China Legal Exchange event provided valuable insights into navigating competing priorities and growing your business through effective ESG strategies and employee management. As businesses face increased regulatory demands and cultural challenges, it is essential to stay informed and proactive in addressing these issues.
For further support, please reach out to us for training, policy reviews, procedure audits, mock interviews, or investigations. If you are interested in learning more about our UK-China legal exchange, please get in touch.
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