Environmental, social and governance (ESG) factors are swaying employment decisions for almost half of UK professionals, according to recent figures from KPMG, with millennials and younger workers driving a growing trend of “climate quitting”: seeking a more environmentally friendly job.

In research on attitudes to work, the firm polled around 6,000 UK adults, comprising office workers, students, apprentices and those who had left higher education in the previous six months. Within that sample, almost half (46%) want the company they work for to demonstrate an ESG commitment, while a fifth have turned down a job offer when the prospective employer’s ESG commitments were not in line with their values. Among 18 to 24-year-olds, that rises to one in three.

Clear commitment

Those aged between 25 and 34 are most likely (55%) to value an ESG commitment from their organisation – but 18 to 24-year-olds (51%) and 35- to 44-year-olds (48%) are scarcely less engaged on the matter. Indeed, one in three respondents has researched a company’s ESG credentials when looking for a job – rising to almost half (45%) for career starters in the 18 to 24 age range.

Meanwhile, two-thirds (64%) of office workers say there are certain industries they refuse to work in for ethical reasons – but a clear commitment to ESG would change the minds of 37% of that segment.

In a statement, John McCalla-Leacy, Head of Global ESG at KPMG UK, said: “It is clear from recent COP27 discussions that, while some progress is being made, there is still a long way to go if we are going to limit global temperature rises to 1.5°C. “It is the younger generations that will see the greater impacts if we fail to reach this target – so it is unsurprising that this and other, interrelated ESG considerations are front of mind for many when choosing who they will work for.”

Talent and transparency

What does this mean in practical terms for corporates? For thoughts on how they should approach this period of increasingly avid ESG awareness, Insights spoke to KPMG’s Head of Student Recruitment, Camilla Weeks.

“Our findings reinforce the growing importance talent places on transparency around an organisation’s ESG journey,” Weeks says. “Younger workers clearly aren’t afraid to vote with their feet when it comes to finding a job that aligns with their values – including being more environmentally friendly.”

Bearing in mind that in just two years’ time, 75% of the working population will be millennials, businesses must have credible plans to address ESG if they want to continue to attract and retain the best talent, Weeks warns. “This not only places a spotlight on the positive impact businesses can have, but it’s an exciting opportunity to differentiate [themselves] in what will be an increasingly competitive market for skills and talent across the board.”

Action plan

There are various measures organisations should take to signal their commitment to ESG-friendly values and practices, in ways that would attract jobseekers’ attention.

“ESG needs to be woven throughout recruitment activity,” Weeks said. “From how organisations seek to attract talent in an environmentally friendly way through to the inclusivity of their recruitment practices, for example.”

Weeks stresses the importance of making sure that an organisation’s values are at the forefront of the candidate experience. “We ourselves are seeing an increased interest in ESG-specific career paths. Organisations need to consider not only the increased competition for those sorts of roles, but the articulation of how all career paths will contribute to the ESG agenda,” she says.

If they haven’t already done so, Weeks points out, companies must look at how they are considering ESG in their broader business strategy, and how they communicate what they are doing. They must also back up their commitments with a clear action plan.

Finally, they need to make sure they are measuring their progress against their commitments, and are being open about how that process works. “Potential employees will be looking for genuine action and commitment,” she adds, “not just a tick-box exercise.”

ICAEW Director, Corporate Governance and Stewardship, Peter van Veen, thinks it should be no surprise that companies with poor ESG commitments struggle to attract high-calibre staff: “For some sectors with poor reputations, this is nothing new – for example, companies that are associated with corrupt practices are left with a significant talent deficit, which can significantly damage future profitability.”

He notes: “Applicants are becoming ever more selective and sophisticated in how they choose whom they wish to work for. Critical analysis and commentary of a company’s ESG efforts are easily accessible online, enabling jobseekers and existing staff to make informed decisions on whether to apply or stay in post. Employees genuinely do care about the company’s ESG activities and commitments and how these align with their own values.

“Companies and their boards must be clear about their corporate purpose and be able to back up any claims they make in relation to ESG and responsible business practices. Telling a good story is not enough. Only those that have an authentic story to tell, backed up with evidence, will get the best and brightest.”

ICAEW Climate Change Executive Sarah Reay says there are many ways to engage businesses on sustainability issues, but the hygiene factors that motivate staff are often overlooked: “The current working population cares not only that employers are meeting salary expectations and providing flexible work policies, but that they are matching personal values too, which are linked more and more to environmental and social causes. The hope is that businesses will increasingly recognise this shift and take meaningful actions to adopt ESG strategies that engage with their workforces throughout the employment process,” Reay says.