As the talent marketplace remains competitive, a company's stance on social issues, such as the environment and climate change, can help attract talent or potentially drive it away. HR leaders must encourage companies to publicize their environmental, social and governance practices so they can hire the candidates they want and keep them as employees.
Over 70% of workers and those looking for work are drawn to environmentally sustainable employers, according to the 2021 study "Sustainability at a turning point" by the IBM Institute for Business Value. In addition, more than two-thirds of respondents said they are more likely to seek out and take jobs with environmentally and socially responsible organizations, and almost half surveyed would take a lower salary to do so, according to the IBM study. A company's sustainability record can make a major difference in its talent search and employee retention.
Here's more about environmental, social and governance initiatives, as well as some steps HR leaders can take to get the word out about their organization's ESG efforts.
What is sustainability?
For the most part, when job candidates inquire about a company's environmental sustainability record, they are referring to the organization's environmentally related business practices, such as carbon footprint and energy use. Social issues, like diversity, equity and inclusion programs and labor practices, are also part of ESG.
Companies are facing more pressure from the government and from consumers to make their business practices more sustainable. Customers have increasingly expressed interest in supporting companies with what they view as positive ESG practices, with 55% of respondents saying company sustainability is "very or extremely important" when they're making purchasing decisions, according to the IBM study.
Meanwhile, the U.S. Securities and Exchange Commission proposed a rule last year that would require public companies to share climate risk and greenhouse gas emissions, among other information, though the rule may be delayed until later this year.
Why companies should care about sustainability
Many company executives believe their recruitment will be positively affected by increased ESG reporting.
Fifty-two percent of respondents ranked talent attraction and retention as one of the most likely beneficial outcomes of enhanced ESG reporting, according to a 2022 Deloitte study, "Sustainability action report: Survey findings on ESG disclosure and preparedness."
In addition, a positive sustainability record can potentially help with the perennial challenge of employee retention as well. ESG high performers also have high employee satisfaction, according to the 2023 study "Do ESG Efforts Create Value?" by Bain & Company and EcoVadis.
How HR can use sustainability to improve recruitment, retention
Job applicants may not be aware of a company's ESG efforts, so HR leaders must take the lead in communicating them to the public.
HR staff can develop blog posts for the company website about the organization's sustainability efforts. HR staff can also create initiatives within the company, like sponsoring a community composting program, and publicize those initiatives so potential job applicants will be aware of them.
If company leaders are weighing whether to take on sustainability initiatives, HR leaders can share the talent-related benefits of adapting an ESG-driven corporate culture.
HR leaders should also make sure company leaders are aware that partners' sustainability practices are an emerging area of contention. Job candidates may object if the company works with vendors or other partners who are seen as negatively affecting the environment.
However, HR executives must also remain alert to the danger of greenwashing. Greenwashing is information that provides a misleading impression that a company's processes, policies or investments are environmentally sound.
A company's attempts to attract recruits can backfire if the public believes the company is practicing greenwashing. HR leaders must make sure HR staff or others working on recruitment efforts aren't exaggerating the company's sustainability practices in an attempt to win over job candidates.