Organisations should be listening to young people when forming environmental, social and governance (ESG) policies to ensure that their strategies are future-fit and free from greenwashing.
With most businesses now incorporating (ESG) policies into their corporate strategies, our ‘Tomorrow’s World’ report highlights the ethical and commercial opportunities of working with Generation Z in defining those polices.
Generation Z – those born between 1997 and 2012 – is the world’s largest population by generation. The group’s digitally driven cultural influence, coupled with its huge surge in spending powerhas made ‘Gen Z’ a significant target audience for businesses and, as the cohort enters the workforce, a much sought-after talent pool.
Our report, which is based on the views of 16 to 25-year-olds from across the UK, warns of the danger of not properly engaging with Gen Z on ESG. Our findings reveal that as citizens and community members, Generation Z is more aware, more influential, and more likely to take action on ESG issues than any other generation, largely due to the advent of the internet and social media.
Awareness on corporate issues
The study reveals the depth of Gen Z’s ESG knowledge and how it influences their buying behaviour. For example, Gen Z is acutely aware of accountability and supply chain transparency with nine-out-of-ten (87%) saying they consider suppliers when deciding how ethical a business is.
When asked about the controversial topic of carbon offsetting, three-in-five (57%) Gen Zs believe it has a part to play in addressing a business’s environmental impact but reducing that impact in the first place should be the priority. For those organisations that continue to offset their carbon emissions, Gen Z’s view is that offsetting should be done in a purposeful and considered way. The largest proportion (58%) thought it should happen through schemes that reached parts of the world that would genuinely benefit.
Having their finger on the pulse of ESG issues means Gen Zs firmly believe they should be taken seriously by organisations. Three quarters (73%) thought businesses do listen to what they have to say, while four-in-five (81%) said Gen Z employees ought to be involved in important decisions in how an organisation is run.
Online and real-world protests
The consequences of businesses not taking note can pose a significant reputational and financial risk with three-in-five (57%) Gen Zs revealing that they have taken action at least once against organisations that are not doing enough on ESG. This includes two-in-five (40%) who take to social media to ‘call out’ businesses, over half (56%) that stop buying products or services and almost a quarter (23%) who have taken to the streets to publicly protest.
For environmental infringements, this passion for ESG also extends to Gen Z’s views on the fines they expect to be levied on businesses that cause damage. Over a quarter (28%) said offenders should face fines of 11% to 20% of their turnover; 20% said that should rise to 30%. This is an eye-watering increase compared to the European Union’s proposed fine of 4% of turnover.
Engaging Gen Z on ESG
Some reports claim that Gen Z spends more time than any other cohort online – an average of 10.6 hours per day, with over half using multiple devices at any one time, according to research from Adobe. Faced with masses of information, there’s a chance that Gen Z, in particular, will only see a fraction of a business’s ESG story, with the bigger picture often getting lost.
This trend plays out in our study where Gen Z’s views can be described as ‘indecisive’ when labelling brands as either ESG ‘heroes’ or ‘villains’, with the research showing several companies – including Nike, Amazon and Adidas – appearing in both camps.
Working with Gen Z
The importance of ethical behaviour and ESG ambitions are also being seen as Gen Z enters the workforce. Over a third (70%) will spend time looking into ESG credentials before choosing to work for an organisation.
In this wide-ranging report, we also cover Gen Z’s attitude to net zero commitments, diversity in the workplace and ESG priorities for 2030. Read Tomorrow’s World to find out more.
About the survey
Research was conducted through an online quantitative survey of 1011 respondents aged 16-25 from across the UK. The research was conducted by Beatfreeks, an insight and engagement agency that specialises in working with young and diverse audiences.
About the author(s)
Ben Stansfield is one the UK's leading lawyers practising planning and environmental law. Ben is based in Gowling WLG's London office and brings with him a wealth of experience advising clients on the consenting and regulation of their projects and their compliance with environmental regulations and reporting standards.
Sharon Ayres is a corporate lawyer with over 25 years experience of helping clients secure a preferential outcome on transactions. She handles every deal with a passion for achieving the best result for her clients, finding solutions to the trickiest of issues.
Anna Fletcher helps clients to solve a wide range of employment issues, from workforce planning to dispute resolution.