August 29, 2023

Why ESG is important in recruitment

Why is ESG (Environmental Social Governance) important in recruitment, and how can it attract and engage your people as an embedded strategy in your business?

Why ESG is important in recruitment

How ESG adds value to your recruitment strategy

Let’s be clear from the outset: Environmental Social Governance (ESG) is a business strategy. The core objective for improving your ESG should not be a metric around recruitment, improving your employer brand, or company’s reputation. Nor should it be solely about enhancing your communications, often called ‘green washing’. Yes, attracting and retaining talent are important outcomes and ESG will substantially improve your reputation with customers, employees, prospective talent, suppliers, and the community. But you need to start with integrating ESG into your strategy and putting it at the heart of your business before you consider how to use ESG in recruitment and attracting top talent.

That being said, in this blog post we look at the importance of ESG in recruitment. So, we’ll assume that ESG is already part of your strategy — or being actively considered — and look at how to embed ESG in your recruitment, as well as the results that can be achieved by engaging prospective talent in your ESG journey.

We love facts and figures, so here’s a few on ESG in recruitment:

One in three 18-24 year olds have rejected a job offer based on ESG commitments, according to research by KPMG.

• 40% of Gen Z and Millennials are willing to switch jobs over climate change, says research by Deloitte.

• While we might think ‘climate quitters’ are just Millennials and younger workers, 48% of 35-44 year olds value ESG commitments by their employers.

This is an enormous proportion of prospective talent who are proactively turning down job offers because of a poor or non-existent Environmental Social Governance record. This ‘quiet quitting’ should be of concern to – and a real motivator for – every employer.

Paradigm shift in ESG and recruitment

The world is changing, fast. And organisations need to change with it. In the past, recruitment predominantly revolved around skills, experience, and qualifications. Today, people want to work for an organisation where there is a shared set of values and sense of purpose.

Here are some of the reasons why ESG is important in recruitment:

Attract top talent: People of all ages, but especially younger generations of job seekers, are increasingly drawn to companies that align with their values. And by 2029, Generation Z and Millennials will make up 72% of the workforce. A robust ESG strategy signals to potential employees that a company is committed to making a positive impact on the world.

Enhance employee engagement: When employees feel that their work is contributing to a greater good, they are more engaged and motivated. An ESG-oriented organisation provides a sense of purpose, fostering a more dedicated and enthusiastic workforce.

Reducing turnover: Companies with strong ESG values tend to foster healthier work environments and exhibit genuine concern for their employees' wellbeing. This, in turn, leads to reduced turnover rates as employees are more likely to stay with a company that genuinely cares about their needs.

Improving reputation: ESG can greatly enhance a company's reputation, not only among potential employees but also with customers, investors, and the broader community. A positive reputation contributes to a competitive edge in the recruitment process.

Long-term sustainability: Companies that adopt sustainable practices and prioritise ESG are better equipped to navigate the challenges of a changing world. This long-term viability can attract candidates who seek stability and a future-focused workplace.

How to embed ESG in your recruitment strategy

We are passionate about closing the ‘say-do’ gap and this is particularly important when highlighting ESG in your recruitment strategy and campaigns. Show what you do, don’t just state what you believe. Demonstrate your actions and the positive impact you’re making on your people and the planet.

Edwards Vacuum is a global manufacturing organisation in the semi-conductor industry — and an example of a great employer in the South West of the UK, who is placing ESG at the heart of their business and recruitment campaigns. They are partners with Action Net Zero, and at Transform we’ve been lucky enough to work with them on a recruitment campaign for their Clevedon site near Bristol, where they employ over 800 people.

Edwards works on 1 in every 3 chips that are installed in the computers, phones, video doorbells, and many other technologies we all use daily. Their vacuum and abatement systems remove and neutralise waste and by-products, allowing semi-conductor manufacturers to reduce operating costs, improve energy consumption, and reduce their carbon footprint.

For their own facilities, Edwards has installed solar panels and rainwater harvesting facilities. They proactively support their community by improving local transport infrastructure for cleaner, greener routes around Bristol, and engage their people in community activities and charity fundraising. They work to enhance Equality, Diversity and Inclusion (ED&I) throughout their organisation. And all these actions are placed at the centre of their recruitment strategies.

We did a wonderful series of videos with their people, and the passion and engagement of every individual was fantastic. Each person connects on a deep personal level with ‘what’ they do, ‘how’ they contribute, and bring their own purpose or their ‘why’ into work. Highlighting this in a recruitment campaign means far more than just offering a good job that fits the skills of the applicant. It’s about deep and positive engagement from the start, where people not only feel proud about what they do, but also proud of the organisation they work for and the positive impact they’re having on the planet, people, and the communities in which they live and work.

What matters to you in the complex world of ESG?

When we work with organisations on their ESG strategy, we seek to understand what matters to them. Or, to use ESG terminology, we conduct a materiality assessment. Because the three aspects of ESG encompass such a huge range of topics, organisations need to be selective about what is manageable and achievable, before setting their ESG roadmap — with continuous implementation and changes in mind. That means the core messages you want to communicate in your ESG recruitment campaigns will change over time, too.

So, how can ESG strategies change depending on varied industry sectors, based on our experience.

The built environment, for example, has a heavy impact on our environment and ecology, contributing 39% of the world’s emissions. It is also a regulated industry with standards, accreditations, and legislation in place. Therefore, a business and ESG strategy could look at reducing carbon emissions, resource usage, waste management, and positive interventions from an environmental and ecological perspective.

Professional services firms, who can have a lower environmental impact, might want to prioritise the social component, as this is key to the firm’s relationships with its employees, customers, supplier, and broader community. Here, we would often focus on diversity and inclusion, employee wellbeing, human rights, and community engagement.

Strong governance might be the focus for organisations in the third sector or public sector, or those operating in highly-regulated environments where strong leadership and risk management strategies are important.

Each sector will prioritise different ESG messaging in their recruitment campaigns. The important thing is to make your ESG strategy and your recruitment campaign specific, relevant, and true to who you are.

ESG and employee engagement / retention

Your ESG-focused recruitment campaign never ends at the point of job offer — employee engagement and retention is strongly impacted by ESG. We know that highly-engaged employees contribute more to an organisation in terms of productivity, and they also stay longer with their employer.

The great news is that there has been a surge in employee engagement according to Gallup’s State of the Global Workforce 2023 report where 23% of the world’s employees were engaged at work in 2022. While these figures might seem low, these are the highest level since Gallup began measuring global engagement in 2009.

And ESG is central to increased employee engagement. A 2020 study showed that top employers have significantly higher ESG scores than their industry peers.

ESG and recruitment is a virtuous circle

By prioritising ESG as integral to your business strategy, you will not only attract the top talent through your recruitment campaigns, you will also enjoy higher employee engagement rates, building your reputation, and increasing your market presence. And engagement is vital as ESG requires every one of us to change our behaviour. That change will only occur when people fundamentally believe in what you are aiming to achieve.

ESG is a win: win: win strategy — your organisation benefits, your people benefit, and importantly the planet benefits. Now that’s a positive message and why ESG should be front and centre of your recruitment campaigns.

Contact us at Transform ESG to find out more about how to set your ESG strategy, engage your people, and attract top talent to your organisation.