Environmental, Social and Governance in Cumbria
Environmental, Social and Governance (ESG) activities are becoming increasingly important in attracting, retaining and empowering talent. I’d go as far to say that ESG factors are no longer optional considerations for business; recent Total Jobs research reported a 62% increase in candidate led questions around ESG commitments, with almost three quarters of job seekers reporting that they would be interested in a job that contributes to preserving or restoring the environment. And there’s no doubt employers have, to some extent, got onboard; Indeed, research reports a 116% increase in ‘green’ job postings from 2019 to 2024, and we know that 88% of publicly traded companies adopted ESG policies by 2020.
But (and it’s a big but) there’s a problem with the way ESG is embedded in many businesses. So much so that while 71% of people express interest in working for a sustainably minded employer, only 29% say Total Jobs, can correctly define green jobs from a list of options. It seems to me that businesses are often responding to candidate ‘wants’ (posting more sustainable jobs, talking about ESG in interviews etc.) without thinking about how this is translated into satisfying deep rooted candidate ‘needs’.
And to some extent, can I blame them? In the competition for talent, employers are trying to tap into the candidate psyche and meet their expectations, expectations that are being generationally challenged. If we take Gen Z for example (those born between 1997 and 2012) Deloitte report that 42% have already changed or plan to change jobs due to climate concerns. Moreover, a KPMG survey showed that 1/3 of young people have turned down a job that didn’t align to their values and in comparison to other generations, Gen Z candidates are 15% more likely to research a company’s ESG credentials. And this is before we start to think about Gen Alpha entering the workforce…
But here’s the thing, despite everything I’ve just said in terms of the importance of ESG, most people will consider ESG only after their financial and wellbeing needs are met. I don’t think that’s necessarily surprising; a base level understanding of Maslow’s hierarchy of needs theory will tell you people will always look to fulfil basic needs before more advanced needs. So, on the one hand, we need to prioritise ESG to meet candidate expectations. On the other, we know that basic needs are, and always will be, more important. How do we balance it all? What’s the answer?
We need to look to embed ESG in such a way that it becomes woven into the fabric of the employee experience. Where it’s not treated as a ‘nice to do’ but clearly and powerfully demonstrated in our everyday dealings. Some examples:
Aligning Incentives with ESG Goals – Incentives don’t have to just be attached to performance in a traditional sense. Remuneration could also be linked with meeting ESG objectives.
Recruit for Sustainability – A recent study conducted by Russell Reynolds Associates, in partnership with the UN Global Compact, found that 92% of business leaders believe that integration of sustainability issues is critical to business success, but only 4% of C-suite role specifications demand sustainability experience or mindsets.
Empowering Employees to Drive Change – Allow employees who show passion for sustainability to create their own internal networks, forums and infrastructure to contribute to ESG policy and initiatives, creating a culture of shared responsibility.
Think holistically about ESG – The S and the G are important. Often, we use ESG only to describe our environmental efforts and focus, but we need to think holistically about ESG to tie the concept back to satisfying base level needs.