Ted Dhillon is the CEO and co-founder of FigBytesan ESG insight platform.
ESG (environmental, social and governance) is often seen as a way for the financial markets to measure a company’s social and environmental performance. But it’s much more than that. Increasingly, potential employees are using it as a yardstick to decide where their next job will be.
ESG represents a set of principles that many future employees around the world adhere to: the idea that companies should operate with sustainability in mind, minimize harm to the environment, and promote social responsibility and community building inside and outside the company .
Generation Z – the group from which many companies will draw their new talent over the next two decades – already believes in these principles more than previous generations.
My company draws talent from all corners, but especially from groups that have studied or worked in environmental sciences. That’s because their values already align with our mission. Someone who wants to contribute to a solution to climate change fits very well with companies that enable them to do so.
But the Great resignation that started with the pandemic is still taking its toll. Even companies outside the ESG industry looking to recruit and retain top talent don’t have the luxury of ignoring the class of climate change warriors. Corporate leaders need to think carefully about how to align their values and practices with this outlook. It’s not enough to say you’re eco-friendly, diverse and inclusive – you have to show it off and “pitch” it during the interview process.
Communicate an authentic message.
No one goes out to support an environmental mission for exactly the same reasons, so coverage should be strategic and, most importantly, should not be seen as greenwashing. Greenwashing, in this context, means making misleading claims to potential employees in order to bolster a company’s environmental reputation.
So how do you convince a top recruit that your company takes sustainability seriously? In short, communicate, demonstrate and engage:
1. You can to communicate a commitment to sustainability through a clear impact statement on every vacancy. It should answer some important questions:
What impact can an individual have at this particular company? How does the individual job contribute to the positive impact the company wants to have on the environment?
If an employee has to choose between you and another company, the “50-50” decision may come down to how well you answer those questions.
2. You can to show sustainable practices by proactively sharing a factsheet or web page with every applicant, whether they ask for it or not. Using social media channels to amplify those messages works especially well for reaching ultra-connected Gen-Zers. This indicates that ESG concerns are not an afterthought, but a priority.
During the interview process, make environmental benefits – even if they are as small as allowances for using greener modes of transportation to work – part of the standard benefits.
3. Retain current employees concerned in discussions about sustainable practices by initiating employee-led committees that have the power to drive new sustainability policies. Mention to prospects (or better yet, have other employees mention it in conversation) that there are internal structures in place to give them a voice on sustainable practices. Prospects will quickly see that there is no greenwashing in that store.
Consider tracking and reporting.
There is an arsenal of green certifications that companies use to boast (the SORROW standard for green buildings is perhaps the best known). But ESG rating systems, those companies that use reported data and create company rankings, can be confusing because they all use different methodologies that may not be completely transparent.
There are better ways to demonstrate real ESG impact. Applicants are looking less for a list of green badges and more for evidence that the company can track its own impact through clear and transparent ESG reporting. If your company already tracks impacts, which can range from emissions to water use to social impacts, package the most recent year (or five years) reporting in an easy-to-understand format for anyone interested in working for the company.
If you’re not tracking the impact yet, developing a plan for this and being transparent about it to prospective employees will at least allow you to make a final statement about where the company is going.
Gen-Z Swedish activist Greta Thunberg is known for targeting older generations who are messing with the ball today. “My message is we’re watching you,” she said a UN climate summit public in 2019. She meant that accountability would be held for the world’s most existential problem, and that business leaders decades from now might be judged on what they do today for being part of the solution.
Forward-looking companies will strive to track ESG impacts, create action plans that meet specific (emissions) targets, and then solicit young climate change warriors to get involved.