Lovewell’s logic: The power of strong ESG credentials

Debbie Lovewell Tuck Editor Employee BenefitsHow far do your employer’s values and ethics align with your own? And to what extent does this consideration influence your decision to accept a role with an organisation?

Research published this week by recruitment firm Resource Solutions found more than a third (39%) of respondents over the age of 55 would turn down an offer to work for an unethical or non-sustainable organisation, even if it offered a highly competitive employment package. A further 27% of this cohort, meanwhile, claim they would quit if their employer displayed ‘greenwashing’ behaviour.

This is in line with the trend we have seen among younger generations within the workplace in recent years. According to research published by Bupa in January 2022, 31% of generation Z would turn down roles with employers with poor environmental, social and governance (ESG) credentials. More than half (54%) of this cohort, meanwhile, would take a pay cut to work for an organisation that reflects their own ethics, on average forfeiting 27% of their salary.

Their organisation’s ESG credentials, therefore, have been an increasing focus for many employers in recent years. The influence of these on consumer behaviour has been well documented and many have now realised the positive impact a strong ESG reputation can have on a workforce too. Research has found that employees working for organisations with strong ESG credentials are more likely to remain with their employer, as well as recommend it to others. On average, productivity levels also tend to be higher among this group.

For some employers, their focus on ESG now extends into their reward and benefits strategies, with many currently looking at what more they could offer in this area. Research published this week by communications and engagement consultancy HarknessKennett, for example, found business leaders typically want more attention to be paid to internal factors impacting ESG, such as wellbeing (57%), diversity (37%) and inclusion (34%), than external factors such as community involvement (26%).

In a number of organisations, this work is still in its infancy, with one in five respondents adding that employee interests are not currently reflected in their ESG strategy. While there is still much that could be done in this area, this represents a huge opportunity to transform their approach and reap the rewards this can bring.

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Sustainable reward is just one of the topics that will be discussed at this year’s Employee Benefits Live, which will take place at Excel, London, on 3-4 October. See more information and register to attend.

Debbie Lovewell-Tuck
Tweet: @DebbieLovewell