TEN TRENDS FOR A ZERO CARBON WORLD
03. (Work)force of nature
As the global economy emerges from its Covid-induced recession, the balance of power in the labor market has shifted decidedly in favor of workers. By the end of July 2021, there were nearly 11 million job openings in the United States, nearly double the number from the year before1; in August, workers were quitting their jobs at the fastest rate on record2. The era of the “Great Resignation” is upon us3, with workers seeking to harmonize their work and personal lives in ways that lock in perceived lifestyle gains from the pandemic4. Quickly ascending the list of desirable employer features: a demonstrated commitment to climate action.
Climate action will drive talent attraction
Collectively, Generation Z – those under 25 who are just beginning their careers – will drive the future world of work. According to one study, nearly 9 out of 10 Gen Zers are concerned about the health of the planet5. An even higher proportion believe brands have an obligation to take a stand on environmental issues6. Yet 60% do not believe business leaders are doing enough in this area7.
This is a precarious situation for employers looking for young talent, as there are indications this younger generation are genuinely willing to put their ethics and personal fulfilment over financial security in their job search. More than three quarters say it is important to work for an organization whose values align with their own, and climate change tops their list of important issues8. A reputation as a climate leader will soon be a clear recruiting advantage within the business world9.
A reputation as a climate leader will soon be a clear recruiting advantage within the business world.
ISSUES OF GREATEST CONCERN BY AGE
Of course, workers also want to work for successful companies, and there is increasing evidence to suggest that a focus on carbon emissions is good for business. For example, companies comprising the EIP Climate Tech Index10 outperformed the market by 280% between March 2020 and 202111. Meanwhile, additional research has suggested that companies producing lower emissions have employees with higher satisfaction, in addition to being more attractive to new workers12.
AVERAGE EMPLOYER CARBON EMISSION INTENSITY
Employers are already adapting to – and driving – this change. More than 1,000 companies have signed up to the Science Based Targets initiative13. And the UN Race to Zero campaign, aside from its engagement with local governments, investors, and educational institutions, has 3,067 businesses signed up, each of which has committed to net-zero carbon emissions by 2050 at the very latest. In the aggregate, this initiative covers 25% of the globe’s carbon emissions, and 50% of its GDP14. We are also seeing an increasing number of for-profit companies committed to social and environmental standards through attaining B Corp certification. While B Corps have been around since before the global financial crisis, there are now over 4,000 companies across 153 industries and 77 countries whose aims balance profit with purpose15, not just in rhetoric but legally binding terms.
Greening the workplace experience
A large part of an organization’s environmental impact is connected to the places and spaces it occupies. Workplaces are also where employees experience that impact most tangibly through its locations, buildout, energy and water consumption, and waste disposal16. Companies looking to recruit and retain top talent understand that their workplace environments need to appeal to climate-conscious workers.
Employers also recognize the importance of location in their talent strategy. Before the pandemic, the world’s major cities acted as talent magnets, drawing in young workers from places far afield. There are plenty of reasons to suspect this will still be the case well into the future, not least because of cities’ collective climate actions. Walkable access to public transit and green space, combined with initiatives to reduce emissions in urban buildings, offer Gen Zers a climate-friendly place to live and work. With a significant proportion of the workforce recently having made lifestyle relocation decisions in anticipation of more remote work, we are likely to see more people choosing where they live based in part on its environmental impact17 – with cities such as Austin, San Francisco, Washington D.C., Bristol, Vienna and Munich18,19 carving out reputations as attractive because of their leadership on climate issues20.
In addition to location, workplaces themselves have long been an integral piece of the talent strategy. Now businesses are prioritizing the creation of an X Factor working environment21 to attract top talent – one characterized by human-centric design, technology, and flexibility – but in ways that manage their carbon spend.
A well-executed office environment offers workers a range of sustainability benefits that go beyond the goodwill related to emissions reduction commitments. As Jane Henley, CEO of the World Green Building Council says, “there is a growing body of research that firmly supports the connections between sustainable buildings and improved health, productivity, and learning outcomes of those who occupy them”22. These changes benefit both workers and their employers. For example, there is a 101% increase in cognitive scores for workers in green, well-ventilated offices and a 12% improvement in processing time when buildings offer staff a view of the natural environment23. One would expect all this to appeal to the cream of the talent crop, to the extent that zero carbon is likely to become a crucial component of X Factor workplaces.
But as they enter the post-COVID world of work, employers now face a new challenge24,25. Just as high-performing workplaces became part of the recruitment pitch in the last decade, so now the flexibility to work remotely is integral to the talent strategy of many companies26. A number of industry-leading organizations have publicly announced their plans to enable a hybrid workplace model, with employees splitting time between company offices and remote locations27. While at first glance the lack of commuting associated with remote work would suggest that it is more carbon-friendly28, the reality is more complex29,30.
Workers at home use more utilities when present all day31, and they tend to take more personal vehicle trips for errands, all of which partially offsets carbon savings from avoiding the commute. Furthermore, remote workers may also choose to live further away from urban cores, living in larger homes and becoming more car dependent. Indeed, an accelerated flow of people toward lower density has been a feature of migration during the pandemic, which is significant given US32.33 and UK evidence that carbon emissions per capita are higher in lower density locations34.
If remote and flexible workers fly for business more often (for example, for periodic company gatherings), their carbon footprints might exceed what they would have been when commuting regularly. One study shows that a 500-kilometre domestic flight produces 15 times the emissions of a 50-kilometre, single-passenger commute in a personal vehicle35. Another suggests that adding one business trip involving air travel each year more than compensates for an additional day per week of working at home36. Furthermore, in some cases, remote and flexible workers use less sustainable fuels, and use them less efficiently, at home than would be the case in a carbon-conscious workplace environment.
Emissions from remote employees all form part of a company’s overall carbon footprint, and organizations seeking to meet their net zero commitments will need to fully account for them37.
To meet carbon reduction goals – and changes in the way we work – companies will need to think beyond their current carbon boundaries38. They will need to shift focus from providing sustainable workplaces to enabling sustainable workforces. There are already some tools that help companies think about the carbon footprint of their remote workforces39 with significant evolution expected in the coming years as corporate attention focusses more clearly on this issue. For now, we can expect to see a variety of potential offers from employers to manage the emissions of the hybrid workforce:
- Subsidizing mass transit (instead of parking) and/or electric vehicle purchases
- Enabling home energy assessments and incentives for retrofits and renewable energy usage
- Rewarding reduced mileage and lower energy consumption via voluntary metering
- Considering seasonal office schedules based on geography to encourage more in-office work during seasons where working remotely is relatively more carbon intensive
The post-COVID war for talent will incentivize employers to demonstrate an authentic commitment to sustainability. As we enter an era where flexible work is set to play a much bigger part in corporate life, companies will have to broaden their definition – and their measurement – of what it means to be green.
1https://www.bls.gov/news.release/jolts.nr0.htm 2https://www.bls.gov/news.release/jolts.nr0.htm 3https://hbr.org/2021/10/with-so-many-people-quitting-dont-overlook-those-who-stay 4https://www.fastcompany.com/90658815/this-is-the-new-battleground-in-the-fight-to-retain-employees 5https://www.conecomm.com/research-blog/cone-gen-z-purpose-study 6https://corporate.myunidays.com/hubfs/Infographics/UNiDAYS-What_Makes_GenZ_Fall_in_Love_with_a_Brand.pdf 7https://www2.deloitte.com/global/en/pages/about-deloitte/articles/millennialsurvey.html 8https://www2.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/welcome-to-gen-z.pdf 9https://www.edelman.com/sites/g/files/aatuss191/files/2021-01/2021-edelman-trust-barometer.pdf 10https://eipclimateindex.com/ 11https://techcrunch.com/2021/03/11/energy-impact-partners-has-set-up-an-index-for-climate-tech-and-its-crushing-the-overall-market/ 12https://www.marshmclennan.com/content/dam/mmc-web/insights/publications/2020/may/ESG-as-a-workforce-strategy_Part%20I.pdf 13https://sciencebasedtargets.org/companies-taking-action 14https://unfccc.int/climate-action/race-to-zero-campaign 15https://bcorporation.net/ 16https://bimpactassessment.net/?_ga=2.202982545.1063159809.1632909795-2024400231.1630513226 17https://thegreencities.eu/themas/climate/ 18https://www.insider.com/greenest-us-cities-2018-5 19https://www.gvi.co.uk/blog/top-5-green-cities-world/ 20https://www.ebrdgreencities.com/ 21See Avison Young's X Factor 22https://www.worldgbc.org/news-media/building-business-case-health-wellbeing-and-productivity-green-offices 23https://www.worldgbc.org/news-media/building-business-case-health-wellbeing-and-productivity-green-offices 24https://www.avisonyoung.com/en_GB/x-factor 25https://avison-young.foleon.com/corporate-marketing/multiverse/summary/ 26https://www.avisonyoung.com/experience/corporate-marketing/multiverse/paradox/ 27https://avison-young.foleon.com/corporate-marketing/global-occupier-analysis/home/ 28https://www.bbc.co.uk/news/uk-scotland-57016421 29https://www.theguardian.com/environment/2021/aug/02/is-remote-working-better-for-the-environment-not-necessarily 30https://www.bloomberg.com/news/articles/2021-03-29/is-telecommuting-really-greener-it-depends 31https://www.telegraph.co.uk/columnists/2021/09/23/dial-generation-z-embrace-jumpernomics-instead-overheating/ 32For instance, in dense metropolitan areas like New York, the average urban family consumes more than 300 fewer gallons of gas per year than their suburban counterparts. See: Glaeser, E. & Kahn, M. (2003). Sprawl and Urban Growth. Handbook of Regional and Urban Economics. 33Ribeiro, H.V., Rybski, D. & Kropp, J.P. (2019). Effects of changing population or density on urban carbon dioxide emissions. Nature Communications, volume 10. https://doi.org/10.1038/s41467-019-11184-y 34https://www.nature.com/articles/s41467-019-11184-y/figures/1 35https://www.bbc.com/news/science-environment-49349566 36https://watershedclimate.com/wfh-calculator 37https://www.carbontrust.com/resources/briefing-what-are-scope-3-emissions 38https://www.mandg.com/dam/investments/institutional/shared/documents/insights/2021/q1/our-real-estate-journey-to-net-zero-final-global.pdf 39https://watershedclimate.com/blog/decoupling-work-from-carbon