A strong Environmental, Social, Governance strategy isn’t just attractive for today’s investors - it’s quickly becoming a non-negotiable factor for job seekers on the lookout for a new role. People are becoming increasingly concerned about the impact of climate change on their quality of life, and it’s easy to see why a growing number of workers are searching for roles at companies that explicitly address these concerns. In fact, ESG is becoming a particularly important consideration for millennial and Gen-Z workers, who will make up about 72% of the world’s workforce by 2029.

With a rising percentage of workers placing a high priority on sustainability as they job hunt, companies must be prepared to provide concrete answers about their ESG programs when communicating with prospective candidates. Failing to invest in ESG could hold companies back when it comes to talent acquisition, especially as businesses in many sectors face a tight recruitment market. Furthermore, companies that neglect ESG might end up dealing with higher employee turnover and lower retention rates, which leads to increased spending on recruitment, hiring, onboarding, and training. Here’s why emphasizing sustainability in your recruitment strategy can help you attract top talent, boost employee engagement, and encourage your team members to extend their tenures at your company.

Sustainability Can Drive Recruitment

In the past, most job seekers did not prioritize sustainability while making career moves, but the tide is rapidly turning in regards to employee values. While only 17% of baby boomers say that they have accepted an offer for a specific job because the company performed better on sustainability than their other potential employers, just under a quarter of Gen Xers have made the same choice. However, about 40% of millennials have chosen to work for a company because of their sustainability performance.

As more baby boomers retire and millennials advance into senior leadership roles, businesses hoping to bring millennials and Gen-Z workers on board must prepare to make progress on their sustainability commitments. Today’s job seekers are keeping sustainability in mind as they send out applications, with 70% stating that they were more likely to take a job at a business with a “strong environmental agenda.” Employee referrals can be a helpful recruitment tool, and workers at companies with robust ESG programs are also more likely to recommend that other people apply.

Many workers are unwilling to entertain the thought of working for a company with a lackluster environmental track record, with 37% of adults in the UK stating that they would “steer clear” of a company with poor green credentials. Businesses should note that workers are backing up these claims with their actions - approximately 20% of job seekers have explicitly turned down jobs at companies because their ESG commitments did not align with their personal values.

This trend is strengthening amongst younger workers, with the figure rising to one in three amongst 18 to 24 year olds. Companies that push sustainability to the backburner may have a harder time attracting young employees who are just breaking into their industry, and they may even notice lower acceptance rates for job offers as eco-conscious job seekers pursue roles at competitors with more impressive ESG programs.

Hiring managers and business leaders might assume that a high salary and robust benefits package are more than enough to draw in top talent. But for lots of workers, their employer’s values are almost as important as their salary. Job seekers are looking beyond salary figures and thinking about their employer’s willingness to lead on environmental issues.

Feeling a sense of purpose at work is crucial for today’s job seekers, with 44% saying that carrying out “meaningful work that helped others” took precedence over a high salary. In fact, about half of all job seekers are open to taking a pay cut in exchange for working at a more environmentally-responsible company, with 75% of millennials agreeing with this statement.

Just how much are workers willing to sacrifice in terms of salary in order to work for an employer who shares their values? This number will vary from person to person, but over 10% of workers say that they would take a pay cut ranging from $5,000 to $10,000. On the other hand, a high salary won’t necessarily distract job seekers from a company’s shoddy performance on sustainability, with 53% of workers stating that they would “never” work for an employer they viewed as unethical, no matter how impressive the salary was. Amongst younger workers, 59% agreed with this statement.

Sustainability and Employee Retention

Employee turnover comes at a high cost to businesses. For example, an American business with 100 employees that pays an average salary of $50,000 can end up spending between $600,000 to $2.6M on turnover and replacement expenses. This means that employee retention should be a top priority for businesses across all industries - and nowadays, sustainability is weighing heavily on workers’ decisions to stay at their current employers or seek opportunities elsewhere.

Employees who are pleased with their company’s dedication to sustainability might choose to stay with the same employer for a longer period of time - just over half of all workers say that they would “stay longer than they otherwise might” at a company if their employer was upholding ESG commitments.

Not only will employees continue working for sustainable businesses for longer tenures, leaders at these companies will likely notice their teams exceeding expectations. Overall, employees who feel that their work has a positive impact on the world will feel more fulfilled and engaged, and companies with high ESG scores subsequently tend to boast higher rates of employee satisfaction. Employees at such companies tend to work faster and take less downtime, and the quality of their work doesn’t suffer for it.

Over one-third of workers say that they have specifically dedicated more time and effort to their job specifically because of their employer’s sustainability commitments. Business leaders should note that sustainability can be a key motivating factor when it comes to inspiring stronger employee performance, and if employees don’t believe in their company’s mission, they might not reach their full potential, with 36% of employees admitting that they would work harder if they felt that their employer’s offerings benefitted society.

Business leaders who are concerned about employee retention should hone in on sustainability as a deciding factor in influencing workers’ choice to stay in their current role or start hunting for a new position. During the COVID-19 pandemic, many people began rethinking their career paths, training for new roles, or job-hopped in search of more fulfilling roles at companies that shared their personal values. Just under one-third of workers have left a job in the past because their employer did not have a sustainability plan. However, integrating ESG into your company’s mission can increase employee loyalty. In 2021, over 50% of employees stated that they were open to accepting an offer at another company - but amongst workers who felt that their companies were making a positive impact on the world, this figure falls dramatically to 12%.

Introducing Sustainability Initiatives With Employee Buy-In

With older workers retiring and more eco-conscious, younger workers entering the labor market and advancing in their careers, it’s past time for companies to implement sustainability initiatives and develop clear ESG strategies. Companies that fail to do so might struggle to fill open roles and keep employees on board for the long haul.

Taking a top-down approach to introducing sustainable changes or developing your ESG goals might seem like the fastest and easiest way to move forward in this area, but soliciting your employees’ unique ideas is a more effective way to gain buy-in. When you go the extra mile to request your employees’ perspectives on sustainability, they will know that their feedback is valued - and chances are, they’ll feel more motivated to go above and beyond when it comes to achieving ESG goals.

You might want to ask your employees for suggestions on creating a more sustainable environment in one-on-one meetings, or you could establish an Employee Resource Group for this purpose. Ensure that any specific objectives you adopt are tied to your company’s overarching mission.

What sorts of environmental policies can you introduce? You can start a recycling or composting program in the office if it’s feasible. You might also want to research zero-waste or sustainable alternatives for office supplies, offer plant-based meals on-site and at company events, and look into switching your utilities over to renewable energy sources.

Is your company located in an area with public transit options or ample bike lanes? 51% of UK adults say they would be more likely to walk or cycle to work if their employee incentivized it, so consider incentivizing sustainable daily commutes, or even offer your employees an extra vacation day if they choose to forego flying when traveling. Adjusting your approach to business travel can be a welcome change - for example, you could book train trips for your team rather than flying. You can also introduce ESG investing options into your benefits plans. Currently, only 2.9% of 401(k) plans come with an ESG investing option, but 90% of employees who are aware of the ESG options that their plan offers choose to invest in them.

While ESG programs are not purely centered around philanthropy, setting up volunteer programs for your employees and donating to charitable causes could also be part of your ESG strategy. Companies that offer paid time off for volunteering enjoy higher employee engagement. For example, your team could help out at neighborhood clean-ups or other environmental volunteer programs. Check in with your employees to see what kinds of volunteer work they might be interested in.

Additionally, you’ll want to communicate these efforts internally to ensure that the entire organization stays in the loop. With 58% of employees stating that they prefer to learn about their company’s ESG initiatives through email, you could consider including these updates in an existing company-wide email newsletter, or launching a newsletter dedicated to covering progress on sustainability.

Highlighting Sustainability in Your Recruitment Strategy

It’s important to ensure that job seekers can easily find information about your sustainability commitments and your ongoing progress towards these objectives. About half of all job seekers say that they take the time to research a company’s values before applying for a role, and if they can’t access the information they’re looking for, they might assume that your company lacks a sustainability program or simply doesn’t prioritize ESG. This is especially crucial for companies hoping to attract younger workers, as 69% of job seekers between the ages of 18 to 34 research a company’s values prior to sending in their application.

Ensure that your sustainability initiatives and ESG programs are explicitly highlighted on any public-facing materials directed at prospective job seekers. For instance, if your website has a “Careers” page, you can include this information in a section about your company values or your unique benefits. If your company has a presence at job fairs or local workforce development programs, you can add these details to any physical materials that you hand out to curious job seekers. You might also want to collect employee testimonials with positive comments about your commitment to environmentalism.

Furthermore, recruiters and hiring managers should be thoroughly prepared to answer candidates’ questions about ESG and sustainability throughout the recruiting and interviewing process. Candidates may inquire about specific environmental goals or benchmarks, how you’re reducing waste in your operations, your partnerships with local sustainable nonprofits, or other ESG initiatives. Being able to answer these questions in detail and provide concrete examples illustrating how you’re backing up your commitments to sustainability will impress job seekers.

Employees have made it clear that a company’s dedication to sustainability could determine whether they accept or turn down an offer. Once they’re hired, workers are paying close attention to their employer’s environmental impact. An effective modern recruitment and retention strategy must integrate sustainability to entice top talent.


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