TRENDING: Consumers, Stakeholders, & Investors are Pressuring Corporations to Adapt
Consumers are having a profound effect on businesses, with increasing demands for sustainable practices, products, and corporate social and environmental responsibility policies and sponsorships.
This is especially true of Millennials, a demographic cohort known for both making and breaking entire industries, and for heavily investing toward ESG (Environmental, Social, and Governance) projects. They're also currently the largest group in the US workforce. The next generation of employees and spenders, Gen Zs, has already proven ready and willing to speak out (and vote) against those contributing to the climate crisis.
Though a significant percentage of these two powerful cohorts believes that businesses should do more to mitigate their negative effects on the environment, only 12% believe real changes are being made at the corporate level.
The pressure is significant: 78% of Millennials and 73% of Gen Z expect retail brands to continue increasing their sustainable practices and product lines. Retailers and manufacturers who meet this expectation are finding their profit margins and brand reputations boosted; conversely, those not getting down with greening-up are seeing hits to their bottom lines and levels of consumer trust.
This pressure on the corporate world comes not only from the consumer base, but also from stakeholders, who are increasingly demanding improved sustainability measures. Additionally, venture capitalists and investment funders are becoming more keen on funneling their cash into sustainable businesses and products, especially green energy and tech solutions.
Long-term pressure from these groups on both American and global companies has had a notable effect so far in helping to change the landscape of corporate social and environmental responsibility.
Nonetheless, there's no room for resting on laurels; there's much more to achieve, and very little time to do it.
Companies are Seeing the Light, So Keep Up the Pressure!
Harvard Business School's research shows that the "costs of mitigating the effects of climate change are likely to be much lower than the costs of leaving it unchecked," and that unmitigated climate change would absolutely lead to significantly higher costs of doing business. Fortunately, recent research shows a noteworthy uptick in global and US business environments, in relation to sustainability.
Across the globe, corporate executives are becoming increasingly aware of the need to operate sustainably, and to incorporate green practices into every aspect of their businesses.
A 2019 study from Deloitte found that nearly 90% of global executives have noticed negative impacts on their businesses due to climate change issues, with about 60% of them reporting that they've already begun implementing internal sustainability initiatives to reduce these impacts in the future.
Many companies are moving toward increased sustainability, even some that are among the biggest climate offenders.
Notably, all corporations, especially the largest and most profitable, need to commit to stronger organization-wide goals and shorter timelines: the time has come to reject the cursory gestures that have defined sustainability initiatives in the past. Ensuring corporate sustainability measures are truly green - and that they do not create negative environmental impacts in other ways - is essential to creating impactful change.
In late 2019, a group of CEOs from leading US companies committed to changing the purpose of the modern corporation; instead of focusing solely on maximizing profits, the new purpose embraces sustainability and responsibility for society as a whole. A paper published by the World Economic Forum in late 2019 doubled down on the movement, stressing its importance in the future of work and our world.
This is heartening news, but if climate scientists are to be believed (and we think they definitely are!), all businesses need to commit to operating as sustainably as possible, as soon as possible, to help our planet not only heal, but thrive.