Today (10 November) is the Youth and Future Generations Day at COP27, which will highlight the power and participation of youth at the UN climate change conferences. To mark this, we are sharing the key takeaways from our Tomorrow’s World report, which surveyed 1,000 Gen Zs to assess how this powerful collective – nearly 25% of the global population – is driving organisational change. Plus, how businesses can take meaningful action in the face of global, environmental, and social challenges.
We’re also sharing some learnings from our recent Tomorrow’s World webinar, where we were joined by ESG and Gen Z experts, Dr Rosina Watson (Head of Sustainability at Cranfield School of Management), Rae Stanton-Smithson (Lush Retail) and Amy Clamp (Beatfreeks) to explore how leaders can future-proof their companies through the implementation of meaningful Environmental and Social Governance (ESG) strategies.
Shaping your ESG strategy to reflect the needs of Generation Z
Why Gen Z’s voice matters
Gen Z (those born between 1997 and 2012) are the employees, consumers and leaders of the future. Despite this, they’re often not considered in high-level decision making. Find ways to ensure that Gen Z is represented on your business board and involve them in higher-level decision making wherever possible. As digital natives, Gen Z are highly informed and have brilliant ideas to share, so creating a platform for collaboration is an excellent way to future-proof businesses. Don’t just talk at your younger audience; find a way to bring them into the conversation in a genuine way.
ESG isn’t just about risk management
According to Dr Rosina Watson of Cranfield Business School, 52% of people will buy or advocate for a brand based on a company’s beliefs, and 62% invest based on company values. The desire for people to know what businesses stand for is a hallmark of Gen Z. For business leaders, responding to stakeholder expectations around environmental issues should be a huge opportunity – and not an exercise in risk management.
Your ESG strategy won’t solve the world’s problems
It’s crucial to understand which specific issues your business is best placed to tackle and which matter the most to your organisation and stakeholders. No one business will solve all of society’s problems alone. Still, we can make a huge difference if each company picks a few key issues and works actively to address them collectively.
Shift your mindset…and your KPIs
How you measure and report success internally and externally is vital for your ESG strategy. Traditionally, businesses have used profit and growth as their success measures. But in the future, companies will need to see profit as a means to an end. Companies must build their approach to people and the planet into everything they do. Dr Watson suggests that businesses could start by reporting on carbon emissions, EDI and ESG measures in their annual reports or include ESG goals in employee objectives.
Delivering ESG in siloed teams introduces risk
Our webinar panellists agreed that siloed sustainability teams are likely to deliver less value, and that this approach introduces unnecessary risk. ESG matters are relevant to every business function, and you need to build cross-team coalitions that hold more comprehensive accountability to deliver a successful ESG strategy. A siloed approach also introduces risk; if your marketing department doesn’t know the ins and outs of your sustainability department, how can you be sure that the messages they’re sharing are authentic? This is where the issue of greenwashing can come into play.
Create a two-way dialogue
Marketing teams have traditionally seen customers as an audience you deliver things ‘to’, but more collaborative approaches will help businesses to evolve. If you want to engage with customers on environmentally relevant topics, like returning packaging, renting or using refillable products, then you need to ‘co-create’ solutions with them. Rae Stanton-Smithson summarised this point as “more humility as humanity” to help affect meaningful change.
Big statements land well with Gen Z – if they’re authentic
Big environmental statements and approaches, like those pioneered by companies like Lush and Patagonia, land well with Gen Z audiences because they’re perceived as genuine and authentic. Beatfreek’s research shows that 87% of Gen Z say they pay attention to a brand’s ethics before they buy from them. Their data also shows that Gen Z does their homework: only 6% take company claims at face value, and 64% will go online to research whether your statements are valid. Companies need to be 100% authentic and transparent to gain their trust.
On communicating your ESG goals (and avoiding greenwashing…)
In our webinar, Rae Stanton-Smith from Lush spoke about how the retailer aims to be fully transparent when communicating its sustainability goals. She advised businesses to be clear about areas that need improvement and the steps they take to address them. You don’t need to bombard your internal and external audiences with every bit of information you have, but you do need to send them regular updates to let them know how you’re progressing.
What role can lawyers play in ESG strategies?
General counsels often find themselves as ‘jacks of all trades’ as they advise on multiple areas. But in-house lawyers typically have a brilliant overview of businesses and knowledge of all departments, making them very well placed when implementing ESG policies. We encourage general counsels to do more than make sure their organisations meet compliance and regulation; the businesses of tomorrow need to go beyond compliance for the company (and humanity) to thrive.
For more information, listen to our Tomorrow’s World: Future-proofing ESG strategies webinar or download our Tomorrow’s World report. You can also get in touch with Ben Stansfield or Sharon Ayres with any questions.
