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ESG - Climate change strategy as a differentiator for talent

Bhushan Sethi
People & Organization Joint Global Leader, New York, PwC US

Your climate change strategy can be a differentiator for talent

In a recent PwC survey on Environmental, Social and Governance (ESG) issues, employees expressed dissatisfaction with corporate investments across a range of environmental priorities. While 55% of business leaders said their companies are stepping up climate change investments in climate change action, only 36% of employees agreed. Setting a top-down strategy for reducing emissions is a big milestone for any company. But how do you inspire the workforce in driving change? That should include finding common ground with the vocal minority of workers who are climate-change naysayers. The pandemic has highlighted many rifts in our communities; climate change is just one of these. In the coming months, companies should expect to play a role in bridging divides, perhaps more than many are used to. 

Environmental investments are rising in...

Employees

Business Leaders

Climate change

36%

55%

Pollution 

35%

56%

Packaging

36%

50%

Water

25%

44%

Mining

20%

45%

Biodiversity 

22%

45%

Q:.How, if at all, does it feel like company’s / your company’s action on the following environmental issues is shifting? Employees (n=2,510) | Business leaders (n=1,257)
(Those who feel their companies are investing more time and resources)
Source: PwC Consumer Intelligence Series June 2, 2021

Employees want their company to show them they are committed to the things they say they are. Businesses responding to investor and consumer pressure to advance ESG goals need to pay attention to building awareness and consensus for change inside their organizations. An engaged workforce is critical to turning corporate net zero pledges into focused, sustained action. Here are three actions to consider to activate your workforce to accelerate your decarbonization journey: 

1. Make climate change part of their story about work:

It’s increasingly clear to businesses that people are passionate about finding an employer that is purpose-led. Almost half of the business leaders surveyed in PwC’s Next in Work survey expect their initiatives around culture, value and purpose to differentiate them in a competitive market for talent. Take the opportunity to make company-wide environmental commitments personally relevant to employees. An environmental narrative rooted in the company’s purpose and values can lead to behavioral change among the workforce. Ask yourself how you can help people make every business decision — be it in procurement, packaging or transportation — through the sustainability lens.

Our ESG survey found that employees’ opinions about business’ ESG impact are largely shaped by direct internal communications, followed by company websites and corporate reporting (news and social media lag behind). As ESG reporting evolves, companies will have to respond to the varying priorities of stakeholders.

Step up strategic communications with employees who yearn for meaningful work. Help them see the business case for change and how their efforts can make a difference. 

2. Build the skills and role changes that can accelerate decarbonization: 

Companies tackling value chain emissions explicitly recognize that net zero requires a business model shift. That, in turn, requires a workforce ready to step into new jobs and roles. Fortunately, most companies won’t have to look far for this talent; 87% of surveyed employees told us they expect their employers to offset the environmental impact of the products they make. What’s needed is a deliberate workforce plan to get people professionally invested in the decarbonization journey.

Upskilling people for climate change action will be industry-, business model- and role-specific. Tech companies are taking the lead in incorporating climate change into their recruitment and retention strategies. But all companies can start moving in this direction. For example, they can empower marketing and sales teams to incorporate carbon-reduction considerations into customer engagement and support. And they can train people in operations to engage suppliers in reducing emissions, whether through contracting principles, financial incentives or innovative collaboration models.

Start by assessing and redefining core environmental skills and competencies, and analyze gaps with respect to those competencies. Then implement a plan that includes upskilling, reskilling and rewards and recognition for net zero progress. 

3. Enable an inclusive transition for all workers:

The deep polarization in our societies includes significant disagreements on climate change. Any workforce strategy around climate change should include these considerations. There is growing awareness that employee inclusion networks should reflect the intersectionality of the workforce and be built around ideas, interests and experiences, in addition to how people self-identify with ethnicity, gender identity, religion, ability, etc.  Environmental inclusion groups may allow people to share their perspectives and respectfully discuss their differences on climate change.

Upskilling and reskilling programs also need to be tailored to different segments of the workforce. One approach may be to build climate change knowledge baselines and then invite people to choose learning plans based on their own goals. In this model, all employees become familiar with basic concepts like greenhouse gas (GHG) emissions, and business priorities and solutions; interested employees get advanced training in functional areas like supply chains; and, senior executives focus on communications skills to promote strategy and coalesce the organization around change.

Environmentally-aware wellness incentives like bike-to-work can build trust while helping both companies and communities. It’s critical to apply an equity lens as you engage and support people. As an example, some businesses form partnerships in their communities to expand educational opportunities and economic access. Consider which segments of your workforce are most impacted by extreme weather events as you direct resources to assist communities and introduce new benefits such as emergency paid leave for natural disasters.

Tailor communications and employee engagement to different groups, recognizing that everyone has their own perspectives on climate change.

Eight-four percent of employees in our survey said they were more likely to work for companies that stand up for environmental issues. The reality is that most companies are in the early stages of lining up the whole organization and workforce behind emissions-reduction targets. How companies engage the workforce — be it climate change activists, deniers or those in between — can set the pace for transitioning to the low-carbon future many envision.