ESG is a guiding principle which measures the various types of impact a business or organisation has on the world around them. E (environmental) refers to anorganisation’s impact on the environment and management of climate risk, S (social) refers to how an organisation treats their employees and supply chain, and G (governance) refers to the internal controls used by an organisation to policy itself.
ESG measures and standards should guide business policies, conduct, development, strategy, and ultimately how businesses interact with their employees, partners and customers. They could refer to a variety of considerations, including:
Attracting and retaining talent is essential to the success of any organisation, but candidate expectations of their potential new employer evolve with generational trends and priorities, ultimately altering the criteria that job hunters use to select a new role. Yes, the job hunt is used by an organisation to see if an applicant is right for the role, but a larger job market with generally more opportunities than a few decades ago means the job hunt is also for the applicant to decide which company is right for them.
Staying competitive as an employer on the job market might vary depending on industry, geographic location and job role, but ESG is an increasingly important candidate consideration across the board. Salary and benefits are no longer the only deciding factors in taking a new job: candidates are looking for a company that aligns with their personal beliefs and values.
The rise of commercial ESG considerations
The importance of commercial ESG and its role in talent acquisition may have come to the fore in recent years, but the term was officially coined in 2004 and the concept predates even the recognised terminology. Socially responsible investing, or SRI, has been around for decades in terms of the divestment in unethical companies; the movement proving that it can actually be commercially advantageous for businesses to improve in ESG areas.
What this commercial advantage might look like in practice is a business seen to be investing in responsible ventures and working towards being a socially or environmentally responsible business might be more attractive to potential customers, partners or investors. Or, a business with a consistent attitude towards ESG-related topics and clear reasoning for what they do in these areas and how they do it might make it easier for potential customers, partners or investors to decide which companies to spend money with.
As the value and investment potential derived from a strong ESG proposition for businesses grew, so too did the individual’s desire and opportunity to be part of it. Broadly speaking, people feel good knowing they’re contributing to a bigger effort to do good – which goes some way to explain why job hunters look to join a company where they can feel good doing good.
So, who’s applying the pressure?
Particularly with the younger talent pool and ‘workforce of the future’, there’s been a significant shift in how much importance job hunters place on the ESG practices of their potential employer – research by Bupa even showing that 31% of Gen Z applicants would turn down a job offer from a company if they weren’t happy with its ESG credentials.
More than ever, it’s thought that an organisation’s attitude to ESG translates into company ethos and shapes the day-to-day workplace: company ethos and attitudes to ESG issues are certainly questioned more during the application process compared to this time ten years ago, as candidates are keen to learn more about the workplace they might be joining. According to Qureos, the biggest motivators in selecting workplaces for Gen Z applicants are:
 | Impact on society (93%) |
 | Work-life balance (77%) |
 | Diversity and inclusion (77%) |
 | Health insurance (70%) |
 | Competitive salary (63%) |
Our Senior Recruitment Specialist has also started to notice universities asking mandatory ESG-related questions to companies advertising roles on their placement portals. So far mostly yes/no fields about whether or not the organisation finds certain ESG-related topics important, but a clear sign that the younger talent pool wants to know if a business is thinking about their environmental footprint, social impact and governing policies.
ESG policies and initiatives are not only an important factor for job hunters deciding which company to work for, but also for investors and customers deciding which company to spend money with.
Often in procurement exercises and investment analyses, stakeholders evaluate an organisation’s progress and ultimate ambitions in certain ESG areas. Proof of a carbon reduction plan, ethical supply chain management, and community initiatives are all examples of commitments often expected of a bidding supplier, so ESG is clearly a hot button for stakeholders.
ESG targets often extend beyond an organisation’s own remit to also incorporate expectations of their supply chain; for example, a business may have a goal to be net zero in their own operations by a certain year and an additional goal to only use net zero vendors by a certain year. So, like Gen Z job hunters are applying pressure to businesses trying to acquire talent, clients and investors play a key role in putting pressure on new and existing suppliers to make ESG progress.
A positive external perception of your brand
Alongside the shift in candidate expectations comes a change in how candidates look for evidence of a company meeting those expectations. Indeed, 50% of young professionals (aged 18-34) in one study say they research a potential employer’s corporate values before applying for a role, which rises to 69% when deciding between two job offers. An online identity where an organisation’s values and ethos are authentically presented will shape how potential applicants view the brand and will attract talent organically.
It’s easier than ever for anyone to build a perception of a brand before even engaging with it: a perception that’s often built on things outside an organisation’s control, such as press articles, online reviews or social media posts. If talent can easily understand the ethos and values of a potential employer based on what they can find online, they will be more easily able to understand where they fit in and picture themselves as part of the workforce.
Embracing ESG is more about formalising all the things an organisation already believes and does – charity fundraising, mental health awareness, neurodiversity inclusion, waste management, and so on – into actionable goals, so potential talent, investors and customers can tangibly see its progress.
Purpose beyond profit could be the key to sustainable recruitment
Sustainable recruitment doesn’t just refer to the environment: filling a role is one thing, but recruiting thoughtfully and hiring the right people for your business long term is key for retaining talent. Research by Robert Half shows that more than a third (38%) of employees would look for a job elsewhere if they didn’t think their employer was doing enough on ESG issues, and 52% of people in a Bupa study said they’d work longer for a company with ESG commitments and recommend it as a good workplace.
In a 2024 Gen Z and Millennial survey report, Deloitte sums up the priorities of younger workers as ‘working for an organisation who has a purpose beyond profit’ – essentially, Gen Z talent (who will account for nearly a third of the world’s workforce in 2025) wants to know that their employer is having a positive impact on society in some capacity.
Like Gen Z applicants are motivated by positive impact – sometimes even more than salary – they look for an employer sharing the same motivation to drive positive change outside of commercial growth. But ESG practices and initiatives don’t only help draw new talent to your business, they are also a good way to sustain employee engagement.
Supporting their employer’s long-term ESG goals helps employees feel that they’re contributing to a greater good, giving them something to focus their energy on outside of their job role and boosting their overall motivation. So, if an organisation presents an honest depiction of their ESG priorities, the talent it attracts and recruits is more likely to be aligned in how they view the world and stay with the business long term.
The upshot? To build an authentic external identity, weight purpose and profit equally, and attract talent who’ll stick around takes a real commitment to ESG goals that reflect the organisation’s true values. There’s no “right” approach, so start by refining your stance on ESG-related topics and shape your strategy around it.
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