More and more, young professionals can be said to prioritize companies that are held to robust commitments on Environmental, Social, and Governance (ESG) ideals in an increasingly fastchanging job market. However, this past week, KPMG International’s Globally released a report stating that a huge gap exists in the efforts made by this generation to lead on climate action versus autonomy within their organizations. Styled as Leaders 2050, the survey polled more than 800 young professionals between 18 and 35 years of age across 48 countries. It showed them to hold very high levels of responsibility toward ESG issues but frustration over a feeling that they were not empowered enough for impactful change.
Enthusiasm Meets Limitations in Driving ESG Initiatives
66% of the KPMG respondents believe that it’s up to them to move the organizations toward sustainable ways and modes of operations. Of this group, only 10% claim they are delegated with the powers required to make this happen. This gap is one of the primary obstacles to the attainment of corporate climate objectives since a lot of organizations seem to subscribe to ESG theoretically but do not empower their most invested in generation with the needed resources nor decision-making authority.
The point was reinforced by Avery Johnstone, KPMG’s Global Manager of its Decarbonization Hub and its Global Chair of Leaders 2050. Young professionals add something to ESG efforts, he said. These people soon to be at the helm have a “different lens” through which to view the world economy and understand what they want from it. “Millennials and Gen Z are an underleveraged asset group that deeply understand what their respective generations want and need, according to Johnstone-as if this represented a call for younger voices to be more involved in strategic climate and social impact decisions.
ESG as a Career Dealbreaker
The report also ties ESG practices directly to career decisions for young professionals. Almost half (48%) of the respondents mentioned that they would even quit their job if they felt that their company is not committed to climate and social responsibility, while 63% consider ESG performance when evaluating potential employers. This led to a trend such that ESG is no longer a fringe matter but a critical factor in employee retention and talent acquisition: now, companies have to work around the values of a younger workforce focused on sustainability.
These data show that the firms, which have no clear record of commitment towards ESG risk, stand not only on the verge of reputation liability but also at an edge losing a high percentage of their workforce to an organization, which may boast of more solidly defined environment and social policies.
Critical Barriers to Effective Action under Climate Change
Young professionals are enthusiastic about ESG, but Leaders 2050 points out that in reality, it still constitutes an important hurdle for integrating these values into the operational strategy of the organization. Cost stood out as the biggest barrier at 29%, and no support from senior leadership was second at 26%. This indicates that, at a large scale, there is a call to go beyond words for involvement of senior leadership in actual investment in sustainable practices and the environment.
Another 49% of respondents say that their organizations have partly embedded ESG principles; many describe their impact as average relative to their industry peers. This mediocrity in performance further underlines the sense of disempowerment among the younger professionals who, despite an apparent desire to drive change, find their efforts bounded by organizational limitations.
Tools Enabling Change
Several tools available are said to support the efforts of young professionals in ESG. There’s communication and being transparent with one another, as these two are considered the key elements for establishing the culture of trust and increasing involvement from various stakeholders. Some 57 percent of respondents -young professionals in the surveyed pool-believe learning and development opportunities are key in spearheading ESG initiatives, while 43 percent believe that digital tools and technologies are vital in helping them achieve sustainable goals. Finally, 40 percent of youth consider external networking opportunities key to building alliances on matters of sustainable action.
While organizations should do better, Leaders 2050 has decided that the only practical step from here would be to train and enable young professionals into leadership skills, so they can lead effectively in ESG initiatives. It also likens the challenge to tap the passion of young professionals in organizations as providing ways for dialogue and knowledge flow, in developing a culture of accountability and transparency in sustainability efforts.
Dangers of Overlooking Young Voices
It warns that without engaging young professionals in decisions and ESG strategies, serious consequences could await it. Avoidance of listening to the younger colleague’s perspective can result in higher turnover rates, loss of confidence among the staffers, and reputational risks which can prove painful. Involving young professionals in meaningful ways will enable organizations to collect innovative and diverse perspectives in a manner that will work hand in hand to help achieve sustainable long-term solutions.
Johnstone also underlined the importance of inter-generational cooperation, asking seniors to set up a proper space where young talent can express opinions on ESG matters. He pointed out that the young professionals expect businesses to live their promises with tangible, measurable action. In this context, nurturing talent and generating across-generational dialogue enable companies to fill the disconnect between leadership and young professionals to create a unified approach toward sustainability goals.
Conclusion: Closing the Gap for a Sustainable Future
The Leaders 2050 report shines light on how urgent it is for organizations to close the gap between ambition and action in ESG practice. Young professionals are eager to contribute toward sustainable change but feel stifled because they lack authority, as well as that necessary support from senior leaders. As companies come under questions from employees as well as customers due to performance in ESG, young professionals may be enabled to unlock innovative, sustainable solutions if provided with tools, autonomy, and respect.
And if they can align their ESG practices with the values and expectations of this younger workforce, they will not only be able to attract and retain top talent but prepare themselves well for a future in which sustainability and social responsibility are paramount.
Source
Information adapted from the KPMG International Leaders 2050 report on young professionals and ESG leadership.