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Changing the world for the better is a concern that is gaining more gravity on the agenda of the new generations of employees. A few years ago, environmental concerns were a mere flag of shared purpose, but today companies are raising and defending that flag daily by announcing their investments in sustainability strategies.

 

It is undeniable that companies can gain a lot from seeking to be more environmentally friendly and socially responsible, especially since the creation of the ESG (Environmental, Social and Governance) concept by the United Nations. As a result, companies such as Boston Consulting Group (BCG), Cash Converters and ManpowerGroup, are working daily on ESG actions. Namely investing in reducing energy and electricity emissions by 90% (BCG example), saving and reducing carbon footprint by promoting smart and sustainable consumption (Cash Converters example), and committing to sustainable ways of working — hybrid and flexible work models which enable all to participate — to retraining and reskilling for meaningful, low-carbon, sustainable jobs (as ManpowerGroup example). However, there has been limited awareness brought to how the ESG performance of companies impacts one of their most important stakeholders: employees.

 

According to the latest data from a Marsh McLennan’s study, keeping ESG policies on the company agenda improves its image and attracts talent. These are crucial to help companies innovate and provide value to the customer, allowing them to maintain competitiveness and market requirements.

 

Based on that study, in 2029, around 72% of the global workforce will consist of Millennials and Gen Zs. These new generations of employees are concerned about environmental and social impact and want to be a part of a company with a purpose, a positive impact on society, and a strategy to address these issues.

 

Although this is a trend, some large companies are already raising these environmental and social standards with ESG actions during the pandemic, going beyond the sustainability strategy: Apple increased their matching gift donations, exceeding $15 million to support COVID-response efforts on a local and global scale, while Google upped their match cap to a significant $20,000 per employee.

 

Therefore, the trend is clear: companies that invest in ESG will become more appealing to the new generation of workers and more able to attract and retain the most sought-after talents in the market. It is a blatant fact that ESG performance increases the competitive advantage of companies, whether we are talking about engaging current employees or attracting and retaining future talent.

 

Today, ESG is a crucial trend to an organization’s future success, but a big change starts with small steps. The first step is to evaluate where the company is in the “transition journey”; then it should define their ESG value proposition; and finally, ESG metrics need to be collected, analyzed, and reported in order to understand how companies can incorporate this into their business strategy. Creating a plan that includes these three steps will help companies to realize the long-term benefits of investing in ESG policies.