In the war for talent companies are increasingly deploying a new weapon — sustainability. “There is no question that sustainability helps to not only recruit talent, but also to retain it,” says Tima Bansal, director of the Centre for Building Sustainable Value at Ivey Business School and executive director of Canada’s Network for Business Sustainability.
Progress on adopting sustainable business practises and creating social as well as shareholder value have been slow.
But as companies, from Unilever to Phillips and from PepsiCo to Procter & Gamble, warm to the green economy they are able to attract and retain employees more easily, and in particular hire younger executives, who increasingly want to make a social impact.
Derek Walker, director of careers at Oxford University’s Saïd Business School, says: “A career which includes creating positive social impact is definitely becoming a mainstream choice for MBA students internationally.”
He adds that organizations are recognising the contributions MBAs have to offer.
Companies are interested in attracting and retaining talent but this difficult, says Luk Van Wassenhove, director of the Humanitarian Research Group at the business school INSEAD.
“They will use whatever helps them achieve this goal, including sustainability,” he says.
A number of top business schools have drawn big brands to sustainability events. Now in its tenth year, the Social Responsibility Forum at IE Business School last year attracted the likes of Deloitte, McKinsey and Telefonica. The Institute for Social Innovation at ESADE Business School recently held the Social Investment Forum, in which five sustainability projects raised €900,000 in funding.
INSEAD’s Luk points out that young people have different views on careers and life-work balances. “They are not set on staying with the same company for their entire work life…Most also prefer to work for a company that has a good reputation — environmentally and socially,” he says.
Recent research from the St Gallen Symposium and market research group GfK Verein, found that work which has a positive impact on society is a top-three criterion for 50% of professionals.
Ivey’s Tima says there is evidence to show employees tend to work longer and harder for sustainable companies.
According to a survey of business executives by professional services firm EY and Oxford Saïd, 87% said their companies perform better if their purpose goes beyond profit. Cheryl Grise, EY global advisory strategy leader, says: “Purpose and meaning have an important role as a strategic [and] transformational element in business today.”
The campaign against climate change has seen organizations from French insurance group AXA to technology company Google change internal policies.
As nations transition to low-carbon economies, there is a growing need for a new generation of leaders in the energy industry in particular, says David Elmes, head of the Global Energy Research Network at Warwick Business School.
“We are starting to get a level playing field in terms of competition between fossil and fuel and renewable energy prices,” he says.
Jennifer Griffin, professor at the Public Policy Department of GWU School of Business, says future leaders critically evaluate the companies they want to work for.
“What the business does, above and beyond what is expected, above and beyond their rivals, above and beyond merely creating value just for shareholders, is an important question they ask of recruiters,” she says.
Experts argue that companies are not yet willing to place a financial value on this but Jennifer disagrees.
“Corporations with well-developed impact investing and risk assessment as well as international development programs are leading the way,” she says.
Kevin Lyons, professor at Rutgers Business School’s Center for Supply Chain Management, says: “Sustainability is now becoming part of an effective business strategy that can reduce risk, improve and enhance innovation, resilience as well as the financial bottom line.”
But monetizing sustainability is problematic because measuring impact and comparing it to other measures is difficult.
Frank Wijen, academic coordinator of the sustainability initiative at Rotterdam School of Management, says: “When a business case can be made, sustainability initiatives are much more robust and will survive economic downturns.”
But he adds that companies should be careful when championing sustainability. “Not all initiatives will have a direct financial pay-off.”