Employers face a rising climate conundrum

Not that long ago, I met a lawyer in London named Tom Goodhead who said something that stayed with me.

His firm, Pogust Goodhead, takes class actions against big companies for environmental disasters and he said one reason for its rapid growth was the large number of young lawyers eager to join from older, more established firms that cheerfully defended the same companies.

I later spoke to a young litigator Goodhead had hired from a global corporate law firm with a lot of fossil fuel clients. “I took a big career risk to be on the right side of history,” Edmund Bentsi-Enchill told me. “But it’s definitely worth it.”

For a long time, I have thought stories like this were interesting but unrepresentative.

A handful of the young in a city such as London, in a field like law, might be willing to abandon a venerable employer for a green-leaning start-up. But has so-called “climate quitting” really taken off? Do employers really need to show they care about the environment if they want to hold on to younger staff? The evidence increasingly suggests they might, and not just in places like London.

I say this having just ploughed through a survey of nearly 23,000 Gen Z and millennial workers in 44 countries that consultants at Deloitte published a couple of weeks ago.

In case your grasp of generational clichés is as loose as mine, Deloitte defines Gen Z as those born after 1995 and millennials after 1983. In other words, people who are generally in their twenties or thirties — and made up nearly half the full-time US workforce in 2021. 

This is the 13th annual study of its type that Deloitte has done and it shows about 20 per cent of younger staff now say they have changed jobs or industries because of environmental concerns. A slightly higher percentage say they plan to do this in the future and more than 70 per cent say that green credentials and policies matter when they are job hunting. 

These numbers gel with European Investment Bank research last year that showed 76 per cent of 20-something Europeans say the climate impact of prospective employers is an important factor, and 22 per cent say it is a top priority.

The more salient point in the Deloitte survey, however, is that it shows a growing need for employers to have more than a mere policy on climate.

The share of workers in their twenties who say they and their colleagues are pressing their firms to take action on global warming has increased from 48 per cent in 2022 to 54 per cent in 2024. The rise was similar for millennials.

The measures they want range from staff sustainability training and renovating the office to make it greener, to the far more demanding prospect of transforming the central business model to make it more climate-friendly, a suggestion made by nearly 20 per cent of the surveyed workers. A similar share said they would like to see their employer “working more closely with governments to advance sustainability initiatives”.

When I asked Deloitte to dig into their data to see if this trend was more pronounced in western Europe or North America, as I expected, they came back with surprising news. 

Both those regions were outranked by south-east Asia, a region that includes Thailand, Singapore, Malaysia and Indonesia. A striking 66 per cent of Gen Z workers and 71 per cent of millennials in that part of the world said they were pushing their organisations to take action on climate change. The corresponding figures in mature western markets were just 50 per cent and 42 per cent respectively.

The industries feeling this pressure most are also interesting. Deloitte’s data shows it is staff in financial services, followed by the energy and resources sector, who are most likely to be pushing for change. Business services and consumer businesses are a long way behind.

Deloitte’s global chief sustainability officer, Kathy Alsegaf, says it is not clear exactly why this is the case. It could be that climate action is more visible to employees in customer-facing sectors such as consumer products, or in western countries, so workers don’t feel the need to press for more action. Or it could be something else.

Either way, I have had to change my mind. Companies do not have to take climate action seriously. But if they don’t, they might find it increasingly hard to hire — and keep — all the younger workers they need.

pilita.clark@ft.com

Letters in response to this column:
Companies who fail to take climate action will lose out / From Scott Sullivan, Human Resources Director, Bates Wells, London EC4, UK

Groups need hand-holding to meet their green goals / From Edna Odhiambo, Nairobi, Kenya