Environment, social and governance (ESG) was first coined in 2004 but largely hovered under the radar for the following decade.
Created to encapsulate the elements of an investment decision that weren’t directly linked to short-term financial return, it has, until recently been a focus for c-suite and investors rather than HR leaders.
This changed in 2022, when the impact of climate change became more apparent from droughts across the UK, sewers unable to cope with flash floods and skiing holidays ruined due to the total absence of snow.
Climate change shifted from being something that impacts others, to something that impacts us personally.
ESG in the workplace:
Top European companies tie executive pay to carbon targets
Walk the walk when it comes to social action
CSR vs ESG- a battle between FDs and HR
This change in attitudes naturally bleeds into the workplace. The growing trend of employees demanding sustainability and climate change action from their current employer, and the willingness to walk away if these expectations and demands are not met, is referred to as climate quitting or, more broadly, conscience quitting.
Climate quitting is closely aligned with the widely reported great resignation of 2022. The global pandemic changed our perception and attitudes to work in many ways but one of the most significant is that it made employees question and challenge historical work norms.
Why do I spend two hours commuting every day only to sit in an office with noise-cancelling headphones only to do work I could do at home? Do I want to do a job that doesn’t appear to have much purpose other than making rich people richer?
Am I genuinely happy at work? When we ask ourselves these difficult questions, we don’t always get the answer we think we want.
Millions of people quit their job in 2021 and 2022 seeking more from their careers.
The lockdowns may have ended but some questions remain. While the post-pandemic questions related to self and wellness, in 2023, many of these questions are more external facing – linking sustainability, diversity and responsible business. Do I want to work for a company that doesn’t care about the environment?
Do I want to work for a company that isn’t diverse? Do I want to work for a company that doesn’t pay its fair share of tax?
The questions aren’t hypothetical – the answers are increasingly impacting where and for whom employees are willing to work. HR leaders need to take note.
Whilst many individuals may not have the luxury of questioning purpose and meaning in their careers, in-demand talent with the skills and traits needed by businesses have enough options to hand in their notice if the fit isn’t right with their current employer.
Approximately 35% of employees state they are willing to quit their role if they felt their employer was taking insufficient or inadequate steps to reduce its environmental impact, according to software platform Supercritical. HR leaders have plenty to juggle already in 2023, so why is climate quitting so critical?
Attrition in the UK is forecast to hit 35.6% in 2023 – an increase of almost 50% on 2019 figures. The quitting of regretted leavers is the ultimate HR headache – quality, trained talent who know your organisation walking out the door, taking their knowledge to a competitor.
The first step is to understand if and how climate quitting is impacting your attrition through structured and thoughtful exit interviews and employee engagement surveys.
Attraction of new talent, particularly Gen Z talent, requires more than just a healthy LinkedIn and sourcing budget. Your employer brand can no longer rely on ping pong tables, beer Fridays and a decent pension – an authentic, purpose led narrative can attract the most in-demand talent. Your employee sustainability proposition is key to the success of this, and HR leaders need to audit, assess, and benchmark their Employee Sustainability Proposition.
It’s not going anywhere. Some HR buzzwords and trends fizzle out as quickly as they emerged, but others become the new norm.
Attitudes to climate change are shifting and are likely to intensify. The percentage of UK adults who feel that rising temperatures will affect them personally has risen by 13 percentage points (from 62% to 75%) in less than a year.
Meaningful change takes time and resources but both the ethical and business case for sustainable HR is, in 2023, undeniable.
Tom Lakin is practice director at Resource Solutions