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January 22, 2019

Why good corporate citizens keep great employees

Written by Lucy Hartley
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If businesses want to attract and keep good talent, they need to embrace sustainability/environmental & social governance (ESG) in everything they do – and make sustainability/ESG central to their narrative. According to a comprehensive analysis published recently in Harvard Business Review, businesses with corporate sustainability/ESG initiatives “can increase employee loyalty, efficiency, and productivity and improve HR statistics related to recruitment, retention, and morale.No wonder sustainability/CSR is one of the major trends shaping the workplace in 2019. Here are two big reasons why:

Employees Want Purpose

Employees want more than a decent salary and perks from their employers. They value employers that can offer intangibles such as a sense of belonging and purpose, as reported recently in a Wall Street Journal article, “Why Perks No Longer Cut It for Employers.” This hunger for intangible rewards manifests itself in many ways, among them people wanting their employer to practice meaningful sustainability/ESG. For instance, three quarters of millennials – born between 1981 and 1996 and the largest age cohort in the United States – would take a pay cut to work for a socially responsible company. And Generation Z (born after 1996) “need to see the connection between what they do and broader social impact” according to HR consultancy WeSpire.

Employees and job seekers are constantly told that what they say and how they act on social media affects their personal brands. That expectation cuts both ways. Digital – especially social – has blurred the lines between corporate and personal branding. People want to feel proud of the companies that they list on their LinkedIn profiles and Facebook biographies. People want to work for companies that care about their impact in the world, not just their profits.

These attitudes about work reflect a broader evolution in the way people think about companies. Almost 93 percent of global consumers want to see more of the businesses they use support worthy social and/or environmental issues, according to the Sustainable Lifestyles Frontier Group. People want to associate with corporate brands whose values align with their own and whose purpose for existing they can get behind, whether they’re shopping for a pair of sunglasses or considering a career choice.

Increased Levels of Transparency

It’s easier than ever for employees to know which businesses are good corporate citizens and which are not. And many companies are falling far short. According to the 2018 Deloitte Millennial Survey, an annual global barometer of millennial sentiment, “Millennials’ opinions about business’ motivations and ethics, which had trended up the past two years, took a sharp turn downward. There continues to be a stark mismatch between what millennials believe responsible businesses should achieve and what they perceive businesses’ actual priorities to be.

Im not surprised. Corporate mis-steps with sustainability/ESG are more widely reported than they were in the past, and we’re all much savvier when it comes to spotting disingenuous sustainability box ticking as opposed to a company with a genuine commitment or purpose. Plus, in the digital age, a company’s dirty laundry gets aired for days, weeks, and months at a stretch, creating a cycle of bad news that builds distrust. That’s true whether a business is caught lying about its emissions controls or an employee is recorded making racist remarks to customers.

But it’s not only consumer and careers audiences that are driving this change. Perhaps in response to public sentiment, governments are holding businesses accountable too. For example, here in the UK, companies with more than 250 employees must report details of the gap between the median hourly rate paid to male and female staff. And publications such as The Guardian are not shy about reporting how these businesses are faring.

These barometers reflect the groundswell towards greater transparency: we expect businesses to issue public reports about their commitment to sustainability/ESG, and we use that information to inform the decisions we make. If this all sounds like airy-fairy nonsense, believe me, it really isn’t. Many investment firms now share tools to help their clients choose which businesses deliver ROI and practice sustainability/ESG; Larry Fink’s 2018 Letter to CEOs spoke to the exact topics discussed here; and wealth management firms ranging from huge global companies such as UBS to online-only challengers such as Nutmeg offer sustainability focused portfolios.

What You Should Do

To attract and keep talent in the age of sustainability, businesses need to practice meaningful sustainability/ESG, and share their story in an authentic, engaging way across every channel where employees encounter a corporate brand. At Investis Digital, we work with many companies that need to tell a better narrative around sustainability/ESG. We advise that businesses:

  • Make sustainability part of your story. Be front and center with it. Lead with purpose: why is this what you believe, and why is that good for business and wider society?
  • Be consistent across channels. Every single touch point matters. If a consumer hears about your commitment to sustainability/ESG on your website or in a store, that positive impression will inform how they perceive you if they want to work for you someday.
  • Be authentic. If your actions are poorly aligned with your statements, your narrative falls apart. In an age of transparency, the disconnect will be found out. Everyone – from the CEO to your newest recruit – needs to know why sustainability matters to your business.  

As a next step, we suggest assessing your corporate brand to better understand gaps and opportunities around leveraging your story to drive business impact. We combine strategic insight with original ideas to create a sustainability narrative that’s relevant and compelling for each of the audiences your work affects -- a story that goes beyond policies and performance, unlocking awareness, affinity, and action across every stakeholder group. Contact us to learn more.

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