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The hidden costs of the ESG U-Turn
Employers risk creating a disconnect with their workforce by pushing their Environmental, Social and Governance (ESG) responsibilities to the bottom of the corporate agenda, warns Robert Half.
According to data from Robert Half’s latest Jobs Confidence Index (JCI) – an economic confidence tracker produced in partnership with the Centre for Economics and Business Research (Cebr) – almost half (47%) of workers revealed that they care more about their employer’s environmental impact than they did three years ago. A further 60% stated that organizations need to do more on ESG, while 67% said that businesses have a responsibility to reduce their environmental impact.
Despite this, 56% believe that most employers only talk about ESG ‘for show’, which signals talent pools can be sensitive to green washing and the ESG U-turns some companies make.
According to Robert Half’s latest statistics, this isn’t just an issue for Gen Z workers, who have historically placed a greater focus on choosing a company based on its commitment to ESG. The JCI found that the majority (61%) of those aged 35-54 believe that organizations need to do more on ESG issues, with 71% of this age group indicating that organizations have a responsibility to reduce their environmental impact, higher than those aged 18-34 (63%).
“It appears that ESG has slid down the corporate agenda for some companies, as attention focuses on other macroeconomic issues. However, as our data clearly demonstrates, employees still place a significant value on businesses that can balance profit with purpose. With workers already stating that they feel leaders are paying ‘lip service’ to ESG and more firms reducing their efforts, there is a risk of a disconnect between workers and employers. A weakened employer brand will only result in a challenge for talent acquisition and management strategies in the longer term in a skills short job market,” comment Matt Weston, Senior Managing Director UK & Ireland, Robert Half.
“What is certainly of interest is that this is no longer an issue that matters more to the younger generations, which has historically been the case. The fact that all employees in the workforce are increasingly placing a level of importance on a firm’s ESG commitment demonstrates that employers really are at risk of damaging their ability to both attract and retain core staff. This also underscores the need for businesses to honestly and transparently communicate their commitment to workplace culture, ethical leadership, and sustainability.”