We all see organisations and business leaders talking about Environmental, Social and Governance ESG (Environmental, Social and Governance) and CSR (Corporate Social Responsibility), but why is it so important and how can it boost your reputation amongst target talent pools?

If we rewind a decade or two, while lots of businesses were talking about ESG, few were actually ‘doing it’, and even fewer were doing it well or with any meaning. That trend has shifted significantly in recent years, partly driven by the worsening climate crisis, and it has moved up organisation’s priority lists to become one of their top concerns of late.

Many commentators would likely agree that it’s nice to do the right thing and to give something back to your core communities and the world as a whole, but there’s also a business case for it, particularly when it comes to recruitment and retention.

Attraction tool

Modern talent, particularly younger generations, want to work for an employer with a conscious. By 2025, millennials will make up 75% of the workforce. A study by Cone Communications showed that 64% of this demographic wouldn’t take a job if their employer didn’t have a strong CSR policy, while 83% would be more loyal to a company that helps them contribute to social and environmental groups. Even outside of this generation, around 70% of professionals overall feel strongly about their employer’s CSR and ESG policies. This trend is only going to grow. A separate study found that 80% of 13-25-year-olds wanted to work for a socially responsible firm and, as managing the climate more sustainably grows in importance, demand for firms to show a conscience will grow too.

ESG for employers

As well as aiding recruitment, launching powerful ESG initiatives that align with your workforce’s beliefs and drivers can also have an impact on other factors. Fostering a collective sense of purpose is a key driver of employee engagement which in turn leads to improved output. Identifying those schemes that can help your employees to feel more loyal and connected to your business will actually improve performance, and few leaders would have connected ESG and success until relatively recently.

Effective CSR has also been revealed to have an impact on pay demands and retention; research by the Fast Company revealed that most millennials would take a pay cut to work at an environmentally responsible company, while Deloitte found that ‘purpose-driven’ companies had 40% higher levels of workforce retention than their competitors. In addition, Benevity’s Engagement Study, which examined the activity of more than two million professionals, found that turnover dropped by an average of 57% in the employee group most deeply connected to their companies’ giving and volunteering efforts. It’s clear that ESG, delivered in a way that is authentic and aligns with your wider employee base, can make a real positive difference to organisations, let alone to the wider world. And when we consider that replacing a departing employee can cost businesses between 150-200% of the professionals’ salary, it makes clear business sense to do all you can to deliver effective ESG campaigns.

Attractive investment

There are also a myriad of benefits for firms looking to attract investment. ESG investing has grown enormously in recent years. A 20-year study by The Torrey Project showed that ‘ethical’ companies enjoy a higher level of stock price growth than competitors and that stakeholder-focused companies had the highest growth of all in stock price (100% higher than that of the S&P 500 over the same period).

Here at Murray, we take our responsibilities seriously. Rather than doing something that may generate an initial impact, but without any real substance, we instead wanted to do something longer lasting, and that would make a real difference to people’s lives and the wider world. We have partnered with Tree-Nation to support tree planting in the UK, national forest recovery in the USA and wildlife recovery in California. We have planted 204 trees, which has offset 25.97 tonnes of CO2 emissions so far. You can find out more about our initiative by visiting our tree-nation forest online. In addition, our website is also net zero and we compensate for the CO2 emissions that it generates. However, these steps are only the beginning of our work to help support the conservation and sustainability of our planet.

ESG can have a major impact on employers looking to boost their recruitment and retention efforts as well as drive greater profitability and secure investment. Those employers that don’t look to adopt initiatives that align with their workforce and the organisation as a whole are only likely to lag behind their competitors and will struggle to secure the skills they need to grow.

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