The ESG U-Turn: Employers Risk Disconnecting from Talent
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As businesses increasingly push Environmental, Social, and Governance (ESG) responsibilities down the corporate agenda, a new report from specialist recruitment firm Robert Half warns of potential risks to employee relations.
The latest findings from Robert Half's Jobs Confidence Index (JCI), produced in partnership with the Centre for Economics and Business Research (Cebr), show that employees continue to place significant value on their employers' ESG commitments. Nearly half (47%) of workers now care more about their employer's environmental impact than they did three years ago. A majority (60%) believes organizations need to do more on ESG, with 56% expressing concern that many employers only talk about ESG "for show." This raises questions about the sincerity of companies' ESG efforts, with employees increasingly wary of "greenwashing" and corporate U-turns on environmental responsibility.
The issue isn't limited to younger workers. Robert Half's research shows that ESG is a key concern across generations. While Gen Z has often been associated with a stronger focus on sustainability, the data reveals that 71% of employees aged 35-54 believe organizations have a responsibility to reduce their environmental impact, a higher percentage than those aged 18-34 (63%).
With mounting pressure from the workforce, Robert Half warns that businesses ignoring the growing demand for stronger ESG initiatives could risk alienating talent and harming workplace relationships.
Matt Weston, senior managing director UK & Ireland at Robert Half, commented:
"It appears that ESG has slid down the corporate agenda for some companies, as attentions focus on other macroeconomic issues. However, as our data clearly demonstrates, employees still place a significant value on businesses that can balance profit with purpose. With workers already stating that they feel leaders are paying 'lip service' to ESG and more firms reducing their efforts, there is a risk of a disconnect between workers and employers. A weakened employer brand will only result in a challenge for talent acquisition and management strategies in the longer term in a skills short job market.
"What is certainly of interest is that this is no longer an issue that matters more to the younger generations, which has historically been the case. The fact that all employees in the workforce are increasingly placing a level of importance on a firm's ESG commitment demonstrates that employers really are at risk of damaging their ability to both attract and retain core staff. This also underscores the need for businesses to honestly and transparently communicate their commitment to workplace culture, ethical leadership, and sustainability."
