Environmental, social and governance (ESG) strategy is becoming a more prominent priority for businesses and not just for senior management teams. Employees are now judging their employers not only on the typical priorities such as pay, benefits and culture, but are also increasingly assessing how truly sustainable the business that employs them is.
Companies that just relay rhetoric rather than implement practical measures to meet ESG goals, will find that increasingly modern workforces are alert to the practice of corporate greenwashing and could potentially look to leave.
In fact, research suggests that a quarter of British workers (26 per cent) would even take a pay cut to ensure their business acts responsibly in terms of the environment, while a further 28 per cent would even quit their job and apply for one which was more environmentally conscious. Therefore, it is critical that businesses understand the values a now majority millennial workforce prioritise and work to ensure they are putting sustainability principles into action.
Employees are becoming more involved in achieving material ESG outcomes in their own businesses – and it is the millennial working population that has taken the lead. They have a reputation for being values- and sustainability-driven in the work they choose. And as of 2019, those aged between 23 and 38 accounted for more than a third of the global population, making them a majority group that is hard for employers to ignore.
Of this demographic, 40 per cent have chosen a job because the company had a better sustainability score. However, employee retention is just as important, with 70 per cent of millennials saying they would stay with a company with a robust sustainability plan.
Growing issue of employee retention
The pandemic has had a significant impact on employee retention. Namely, large proportions of employees decided not to change jobs during lockdowns and, as a result, many businesses are anticipating a large amount of pent-up turnover as we emerge from the midst of the pandemic. As an expression of this trend, in our recent snap poll 63 per cent of employees said they were highly likely to change jobs in the next months.
Clearly then, businesses must think about the policies and attributes that make them more attractive to potential employees – as well as having a firmer focus on sustainability policies. If firms fail to consider this, in the long term, there is a danger that their top talents switch to other more sustainably minded companies.
But what can firms do to embrace sustainability effectively?
Not a box ticking exercise
Sustainability needs to be a core focus for all businesses rather than being treated as a box ticking exercise. Companies should have a set of policies so that potential employees know their employers believe in and do action. They must be vocal about their policies but ensure that they also deliver on their promises. Equally, their employees, not just the senior management, must be part of the corporate conversation when it comes to values and ESG.
With this in mind, companies should take stock of their current position with regards to ESG to truly understand the potential next steps they need to take. For sustainability to be taken seriously, firms must be transparent in the work that needs to be done and provide clear targets to underpin significant change.
Overall, with the millennial generation acting as the driving force behind workers becoming increasingly sustainably minded, it is clear that companies are going to have to listen to their demands when it comes to ESG. By taking stock and setting genuine and honest goals for ESG commitments, companies will be able to steer clear of the list of businesses that are being called out for greenwashing – and hold on to their employees.
Deborah Gray is director at recruitment firm Totum Partners