Sustainability and the workforce: a strategic imperative for the future

In my role, I’m particularly attuned to a paradigm shift occurring across market landscapes. Sustainability, once just a facet of business development, has become a driver with 98% of companies in the S&P 500 publishing a sustainability report in 2022. Adopting responsible business practices is no longer an option — it’s a requirement.

While many organizations cite emissions and other environmental data as key sustainability indicators, the picture is much bigger. Sustaining your customers, your operations, and, most importantly, your employees is all part of building a responsible business strategy that incorporates people, the planet, and our common prosperity.

From my vantage point, the intersection of sustainability and workforce management is perhaps the most critical area of focus. Companies that integrate sustainability into their organizational culture not only contribute to environmental stewardship but also enhance employee engagement, attract top talent, and drive long-term profitability.

The business case for sustainability

Before addressing sustainability in the workforce, it’s important to understand the imperative in business at large. Today’s customers, employees, and companies expect a sustainability strategy; having one is paramount. Organizations are also bound by new regulatory changes in their efforts to drive operational efficiency, further prioritizing responsible business initiatives.

Consumer expectations

According to the PwC 2024 Voice of the Consumer Survey, customers are willing to pay a 9.7% sustainability premium, on average, as almost 85% report experiencing first-hand the disruptive effects of climate change in their daily lives.

Employee mindset

The 2024 Deloitte’s Gen Z and Millennial Survey says that 86% of Gen Z and 89% of Millennials report that having a sense of purpose is important to their overall job satisfaction and well-being. Respectively, 44% and 40% have turned down an employer based on their personal ethics or beliefs.

Regulatory landscape

Governments worldwide are instituting stricter environmental regulations. For instance, the European Union's Green Deal aims for a 55% reduction in greenhouse gas emissions by 2030. In North America, the U.S. has introduced the Climate Corporate Data Accountability Act (CCDAA), requiring companies to publicly report their greenhouse gas emissions starting in 2026. Canada’s Net-Zero Emissions Accountability Act sets targets for net-zero emissions by 2050.

Operational efficiency

Sustainable practices can lead to cost savings through improved resource efficiency. A report from the World Economic Forum indicates that up to $2.3 trillion could be saved globally each year through better resource efficiency.

The workforce impact

Sustainability initiatives profoundly influence workforce dynamics. Here are key areas where sustainability intersects with employee engagement and productivity:

Attracting and retaining talent

A commitment to sustainability can be a powerful recruitment tool. According to a 2022 LinkedIn report, companies that prioritize sustainability have seen a 24% increase in job applications compared to those that do not. Employees, especially millennials and Gen Z, are increasingly prioritizing work for companies that demonstrate a genuine commitment to social responsibility.

Employee engagement

Involving employees in sustainability initiatives fosters a sense of ownership and pride. When team members see their organization actively working towards positive environmental outcomes, it can enhance morale and collaboration. A study by Harvard Business Review found that companies with high employee engagement scores outperform their peers by 147% in earnings per share.

Skills development

The transition to sustainable practices requires new skills and competencies. Organizations that invest in training programs focusing on sustainability practices not only upskill their workforce but also cultivate a culture of innovation. The World Economic Forum estimates that 85 million jobs may be displaced by 2025 due to the shift toward sustainability, but 97 million new roles will emerge, underscoring the need.

Health and well-being

Sustainable practices often align with employee health and well-being initiatives. While corporate back-to-work mandates are on the rise, there is, for example, a report by Global Workplace Analytics that states remote work could reduce greenhouse gas emissions by 54 million tons annually if 30% of the workforce worked from home regularly. Additionally, workplaces that prioritize natural light, green spaces, and eco-friendly materials create a more pleasant environment, positively impacting productivity and employee satisfaction.

Challenges and considerations of a sustainability strategy

While the benefits of integrating sustainability into the workforce are clear, challenges remain. Organizations must navigate the complexity of change management, ensuring that sustainability initiatives are embraced at all levels. This requires clear communication, leadership commitment, and continuous training.

Furthermore, measuring the impact of sustainability initiatives on employee engagement and overall business performance can be challenging. Companies should develop metrics that link sustainability efforts to workforce outcomes, ensuring accountability and transparency.

A sustainable future

Sustainability is no longer a peripheral concern; it is a central component of strategic business management. Organizations that effectively integrate sustainability into their workforce strategies will not only enhance their competitive advantage but also contribute to a more sustainable future. As the business landscape continues to evolve, the alignment of sustainability with workforce initiatives will be critical for success. Embracing this shift is not just a responsibility — it's an opportunity for transformative growth.