Millennials push ESG up the agenda
As an increasing percentage of millennials start to dominate the US workforce, companies need to gain a better understanding of environmental, social and governance (ESG) issues.
Ali Payne, president of Ethos, and Lou Raiola, practice leader, ESG at Ethos, said that 75% of US company employees could be millennials by 2025 and that ESG issues are an increasingly important topic for that demographic.
Concerns over ESG issues are accelerating, the team from Ethos told the Cayman Captive Forum 2022, and this is the case from public reporting companies and their C-Suite, down through their organisation and into procurement with an increasing focus on supplier alignment.
Simultaneously, a bottom-up ripple effect driven by the rise of citizenship, particularly among the younger workforce of generation Z and millennials. This demographic is pushing for faster change and demanding that companies are a force for good. Other factors driving the change include regulation at federal, state and local level and investor demands.
The converging impact of both forces requires companies to seek help in redeveloping their culture strategy and how they drive employee engagement.
Raiola pointed out that 90% of S&P 500 companies now publish ESG reports and that ESG is not a new phenomenon – it actually dates back to the 1970s, when concerns over socially responsible investing were stated widely.
When the pandemic hit, and companies had to listen to their employees about issues like working from home, the prominence of ESG hit a tipping point and it rapidly grew in importance.
Raiola urged companies to examine their supply chains for ESG elements, such as carbon footprint issues and sustainability, which he said can be a blind spot.