Gen Z, Millennials Embrace ESG, Says Survey
Millennials and Gen Z place significance on Environmental, Social, and Governance (ESG)—a company's financial efforts towards environmental and social changes and corporate governance.
According to the Society for Human Resource Management (SHRM), ESG initiatives are crucial for attracting and retaining workers, particularly the younger generations.
ESG serves as a framework for organisations to implement environmental, social, and governance changes. Approximately 41% of US workers believe ESG initiatives are important, with 46% of Gen Z and 55% of Millennials emphasising its significance. ESG efforts include reducing waste, providing training programmes, ensuring human rights, promoting diversity, and more.
The survey indicated that environmental factors are the most important ESG issue for US workers, followed by social and governance issues. More than half of the respondents (52%) chose the environment as the main ESG focus for their organisation, followed by social (34%) and governance (15%) factors.
The most favoured environmental initiative was reducing waste and pollution, followed by reducing climate change and improving energy efficiency. Improving employee health and safety, working conditions, and helping local communities were the top social ESG initiatives. While reducing corruption and bribery, increasing transparency, and providing fair compensation were favoured governance ESG initiatives.
McKinsey Sustainability reported in August 2022 that ESG growth is being driven mainly by the environmental component and responses to climate change, with the social dimension gaining prominence.
According to a separate survey by SHRM Research, US executives view ESG initiatives as even more important than employees. While 41% of employees ranked ESG as important, 51% of executives did. Additionally, 75% of executives believe ESG initiatives positively impact employee engagement.
Social objectives were the top priority for organisations with ESG-related goals, followed by environmental and governance. Executives preferred social ESG goals, while employees preferred environmental goals. Lack of time, employees, and funds are the main challenges that prevent organisations from investing more in ESG-related goals.
It seems that workers are increasingly interested in ESG strategies and their impact on the workplace. Many workers consider an organisation's ESG strategy when applying for a job, and those who work for organisations with ESG-related goals report higher levels of pride and meaning in their jobs.
Additionally, workers are willing to make personal sacrifices, such as taking a pay cut or relocating for a job, if an employer's ESG strategy aligns with their values and beliefs. However, there is still room for improvement, as over a third of workers are unaware of their organisation's ESG strategy, and lack of time, employees, and funds are the top challenges that prevent organisations from making additional investments in ESG-related goals.