The tide of pressure on businesses to prioritise environmental, social, and governance (ESG) principles is growing. Partners, investors, and clients are all placing a premium on sustainability values and now so too are employees. Not only are growing numbers of potential employees evaluating prospective employers based on their environmental credentials, alongside typical priorities such as pay, benefits, and culture, they are increasingly becoming aware of ESG rhetoric without action, which could be deemed as corporate greenwashing.
In fact, recent research found that 26% of British workers said they would be willing to take a pay cut in exchange for working at a business that acts responsibly towards the environment. A further 28% would consider quitting their current role and transitioning into one which was offered by a more environmentally responsible company. Put simply, workers are translating their values into action and the legal profession is no exception.
Employee retention and attraction are vital in order for firms to survive and thrive, particularly as many workers explore new opportunities in the wake of lockdowns. So, it is vital firms understand and embrace the values of a now majority millennial workforce to ensure they are putting sustainability principles into action and are avoiding the threat of greenwashing for good.
The rising millennial generation
Ensuring an appreciation of the values of the next generation of both lawyers and business services professionals is of vital importance in helping achieve a truly sustainable cultural shift. Employees are now becoming proactively involved in integrating material ESG outcomes in their own businesses, driven by the millennial demographic in particular.
Millennials have a reputation for being values-driven in their approach to money and careers. Indeed, as of 2019, those aged between 23 and 38 accounted for more than one-third of the global population, making it hard to ignore the population group, which now accounts for the majority of the UK workforce.
Of the millennial demographic group, 40% have chosen a job because the company performed better on sustainability. But a commitment to sustainability is not just about attracting talent, it’s also about retaining it, with 70% of millennials saying they would stay with a company with a robust sustainability plan.
Retention: a rising priority
The aftershocks of the pandemic are also making retention even more of a priority for law firms, particularly when conservative estimates suggest that turnover can cost employers 33% of an employee’s annual salary. With large swathes of employees deciding not to change jobs during the pandemic, many businesses are anticipating a large amount of pent-up turnover as we emerge from lockdowns. In the UK, 48% of office workers have said they have found a new role, are actively looking, or will be leaving their job this year. Furthermore, in our recent snap poll, 63% said they were highly likely to change jobs in the next six months.
As a result, businesses need to think about the policies that make them more attractive than others – and sustainability policy is clearly no different. If firms don’t think about sustainability in the long term, there may be a large increase in talented individuals moving on or finding somewhere else that is more sustainably minded.
So, what can firms do to genuinely embrace sustainability?
Embedding ESG into company culture
A common error is for firms to treat ESG as a box-ticking exercise when instead businesses need to hardwire sustainability and ethics into their culture and way of being. Having a simple policy around inclusion is no longer enough – this is about having a set of policies that potential employees know you believe in.
What really engages employees is when a firm not only talks about diversity, employee voice, mental health, and wellbeing with passion, but puts their words into action. A major part of this is making employees part of the conversation about the firm’s values – for ESG to be truly embedded into company culture, it has to be based on principles that entire teams feel proud of.
Taking a transparent and honest approach
Truly embracing sustainability commitments means taking an honest view of how a firm currently performs and taking stock of where they are right now as an organisation. For sustainability to be genuinely on the agenda, firms must be transparent in the work still to be done with clear targets to underpin pledges of change.
Similarly, firms need not try to do everything ESG, but should focus on the elements which align with the business ethos and can truly be delivered. Again, this will help encourage an environment of genuine understanding and sustainability rather than an inauthentic approach that risks being categorised as greenwashing.
Overall, it is clear that with such a large millennial workforce and with other demographic groups becoming increasingly sustainably-minded, companies are going to have to listen to the demands of employees when it comes to ESG. Firms must take stock and set genuine and honest goals for ESG commitments to avoid the rising tide of greenwashing or risk current and potential employees voting with their feet.