According to several studies, employees are willing to accept a lower salary to work for a sustainability-conscious employer. In addition to this shift in employee priorities, customers and consumers in all economic sectors also prefer ethical brands to those that openly pollute and cause environmental harm.
Before the 21st century, keeping companies accountable for their environmental impact rested in the hands of federal agencies or environmental organizations. Now, accountability has trickled down to employees, making it critical to stress the importance of corporate social responsibility (CSR) in business.
“Our report clearly indicates that places where people live and work may cease to exist, that ecosystems and species that we’ve all grown up with and that are central to our cultures and inform our languages may disappear,”
– Prof Debra Roberts, co-chair of the IPCC.
Climate anxiety also encompasses fear of perceived and real health effects. If temperatures rise to the projected extremes, half the global population could experience life-threatening climatic conditions from heat and humidity, such as wildfires. A recent example comes from the significant increase in depression, anxiety, and substance abuse that was observed after the Fort. McMurray, Alta., wildfire. This devastating event was shown to have been partially caused by climate change, highlighting your CSR efforts can help alleviate climate-induced mental health issues and improve employee satisfaction.
Environmental Sustainability is Affecting Personal Investment Decisions
Another rising phenomenon has been the interest in making sustainable financial investments. Not only do people want to earn more money, but they also want their money to have a positive impact. A survey published in TIME investments revealed that 92% of UK-based financial advisers had seen increased demand for assets with a positive environmental and social impact.
92% of UK-based financial advisers had seen increased demand for assets with a positive environmental and social impact. (TIME Investments)
Responsible investment is slowly becoming essential in many people’s portfolios, and assets that incorporated environmental, social and governance (ESG) factors into the investment selection process totalled $2.13 trillion at the end of 2017. Customers, shareholders, and employees are also increasingly aligning their investments to their values and leveraging them for positive social impact. This clearly signals that companies are being demanded to include CSR goals and sustainable investments in a long-term strategy.
Reporting Climate Action is Not Enough
Including corporate social responsibility in your business ethics attracts talent, increases employee engagement, and creates sought-after workplace culture. However, companies often avoid taking real action and do not demonstrate their commitment to change. Simply reporting climate action or undertaking vague climate action projects is not enough. Organizations that focus on perceived versus authentic climate action often hide behind nonstandard metrics and conduct insufficient auditing, which presents unreliable ESG ratings and puts them under scrutiny by their current and prospective employees.
An example is sectors that emit greenhouse gases (GHG) but struggle to note the specific source of their emissions. The technology industry emits GHGs from electricity consumption but sometimes fails to report them. Upstream and downstream emissions, such as those generated in the value chain and employee business travel (Scope 3), have proven to be challenging to convey. Less than half of companies that choose to track data report scope three emissions, with some disclosing that 95% of their carbon emissions fall in scope three and are not trackable.
Proving your Climate Action to Potential Employees and For Employee Retention
According to PWC analysis, 64% of UK CEOs view climate change as a threat to their business, with a quarter extremely concerned, adding to employee-enforced accountability. Transparent reporting, tracking and clearly defined actions will positively contribute to employee retention. Your CSR reports should provide precise measurements and metrics that are preferably related to a measurable standard (GRI, SASB or other) and show qualitative data. For people to grasp your impact, you must also include intuitive reference points and comparisons. This will ensure that anyone can understand the impact of your efforts.
64% of UK CEOs view climate change as a threat to their business, with a quarter extremely concerned, adding to employee-enforced accountability.
Other methods may include partnering with organizations that provide already tracked climate action initiatives, such as Canada Forest Trust. Initiatives like planting a Smart Forest will guarantee that your employees know you care and that you are invested in them and their future. Employees want to see this proactive change. In fact, they want to be agents of change, and they want to be the ones taking action with you. This is why partnering with a company like Canada’s Forest Trust is a no-brainer. You will give employees the power to take action with the reassurance that your investment is monitored and maintained under a forever forest guarantee. When it comes to investing in climate action and your employees, It is all in the details.