PwC’s Global Workforce ESG Preferences Study 2024

PwC’s 27th Annual CEO Survey found that ESG continues to be high on organisations’ agendas due to both increased regulations, and consumer and reputational pressures. By investing in these strategies and policies, companies aim to drive desired behaviours, increase engagement and help attract and retain the right talent.

But despite these investments and focus by leadership, the perceived value of these to the employee may not always be tangible or significant. To understand this, PwC has carried out global research - alongside TrueChoice - capturing insights from over 5,000 respondents across 95 countries to better understand the level of importance and the value attributed by employees of their employer's Environmental, Societal and Governance (ESG) strategies and policies. This allows companies to help identify whether (and which) ESG strategies and policies are most important and valued by employees.

Results show that employees are not sufficiently engaged on sustainability and ESG enough to make positive and meaningful organisational change. However, there is an opportunity for companies to make ESG more central to the employee promise and experience to make it more personal, meaningful and impactful.

Unsurprisingly, nearly half of participants consider their company’s ESG policies only after their financial and wellbeing is secure. Their preferred way to engage with ESG goals through their job is largely tied to benefits that have a direct impact on the individual. Attributes that are important for this group include such things as health and wellbeing, upskilling and development, addressing the gender pay gap, and managing reputation - implying that employees are focussed on job security, their wellbeing is looked after, their skills are being developed and they have a future career.

Other key preference groups identified through the results include:

38% of participants value salary most, but weigh ESG policy highly

• Environmental factors are important to these people, specifically seeing how their company is responding to climate change.
• A subset of these employees are also extremely focused on their company’s policy on carbon emissions and recycling and reuse practices.

19% of participants value ESG policy similarly to or more than salary

• The largest group of this cohort are more concerned with environmental practices, governance, and accountability than average. However, few specific or standout factors are clearly more important to this group, indicating that these people are likely very specific in the ESG practices they care most about.

The opportunity

By creating a ‘strategy for a sustainable age’ rather than a ‘sustainability strategy’ employees will care about a business’s overall direction.The combination of a sustainable age and tying the value of ESG into the fundamentals of Total Reward builds a positive outcome for employees and the business.

Overall, fair and equitable salary increases and your Total Reward are ranked as the most important for participants. Individual attributes show fair and equitable pay, 10% salary increase and fair and equitable benefits ranked as the top three in terms of importance. In addition:

• Societal practices are the most valued of the ESG categories, with the bulk of the top societal attributes benefitting the individual rather than broader society contributions
• Environmental and governance practices are ranked 4th and 5th respectively, with the top attributes being recycling and reuses practices, managing reputation, waste management and privacy policies
• ESG communications, transparency and accountability is least valued by respondents, with the most valued attributes being trust in their employer, holding the organisation to account and the setting of appropriate company ESG performance objectives

The opportunity

Rethinking reward to embed all aspects of ESG into the Total Reward offering will create a more holistic and tailored view for employees. This would raise the importance and value of ESG whilst tackling the fundamentals of Total Reward to help establish that people are paid fairly, their wellbeing is looked after and they are developed.

Once Total Reward factors are satisfied, societal factors are the most favoured of ESG attributes. Wellbeing leave and allowances, and societal health and wellbeing is relatively equivalent in terms of importance to an 8% and 6% salary increases. Societal health and wellbeing, approach to employee engagement and satisfaction are the only two ESG attributes ranked in the top ten.

Salary and Total Reward have five attributes within the bottom ten preferences, including 0-2% salary increase, company charitable support, ESG targets in incentive plans and leave for volunteering. ESG preferences that are least value consist of ESG third party checks, transparency of company ESG performance, and broader societal attributes that don’t directly impact the individual.

While governance overall is generally less important, an employer’s reputation is ranked the highest of any governance related attribute (ranked 13th) and has a perceived value almost 15% more than the next most important area of governance (privacy policies).

The opportunity

Societal attributes, including societal health and wellbeing, employee engagement and satisfaction, and upskilling and development are significant motivators for attracting and retaining talent for an organisation. Organisations should broaden the employee value proposition to incorporate societal factors impacting both the individual and broader society to enhance impact and value.

By focusing on the need for good risk and governance and an organisation’s reputation as an employer, people will listen and act. This supports and goes to the need to work for a reputable employer that they can trust and be proud to work for.

ESG as a whole has a slightly bigger impact on attracting talent vs retaining talent.

Of the ESG categories, societal has the greatest influence on retention, with a significantly greater proportion of people indifferent when it comes to environmental and governance factors. Three in four people believe that the S in ESG is important or very important when choosing an employer, which is largely maintained when considering to stay.

Non-financial reward & benefits, ways of working, and purpose, culture & values categories showed increases in importance when deciding to stay with an employer - compared to choosing an employer.

When deciding to stay with an employer, the overall percentage of unimportance has increased for ESG categories, while all other categories have increased - stressing the importance of making relevant changes and communicating the importance of these effectively.

The opportunity

Results show that ESG contributes to attraction, and organisations have an opportunity to enhance the profile of their ESG profile/impact during recruitment. By effectively communicating the personal impact of ESG as part of an employee’s experience, organisations have a greater chance of providing a more tailored and personal experience which could significantly improve retention.

It is important to consider that drivers for ESG initiatives by companies go beyond just the employees' preference and perceived value, and that value can differ greatly between the employee and an organisation’s strategic priorities.

This provides an opportunity for a greater emphasis on a company’s strategic priorities, employee awareness and incentives alignment (e.g. managing a companies reputation has a high relative importance but third party checks / approach to workers in the value chain is less important).

Inevitably employees’ ESG preferences also vary widely between different parts of the world. And a drill-down into the findings by region reveals some fascinating insights to help to shape companies’ approaches.

Take workers’ level of satisfaction with their employer’s current ESG policies and practices. Employees in Asia Pacific (APAC) are the least satisfied with how their companies are addressing ESG at the moment, being 3 percentage points less likely to stay compared to the global average – 64% for APAC versus 67% globally. By contrast, workers in the Americas region (AMER) and Europe, Middle East and Africa (EMEA) are 2 and 1 percentage points respectively more likely to stay (69% for AMER, 68% for EMEA) based on current ESG policies than the global average (67%).

However, if their employer makes enhancements to its ESG policies and practices, APAC employees’ willingness to stay increases dramatically. In fact the proportion saying they’re likely or very likely to stay leaps to 71%, which is an 11% increase and the biggest rise globally, followed by AMER workers in second place.

EMEA is less influenced by enhancements to ESG practices, with a 27% increase in neutral responses on intention to stay if enhancements were made.

The opportunity

By recognising and understanding the differences across regions, it provides another fantastic opportunity for organisations to better personalise offerings and experiences. The outcome - a more motivated and productive workforce in every region that stays longer and helps produce a more profitable business and a bigger and more positive impact on the world.

What all this shows is that there lies a huge opportunity for companies who want to make meaningful and sustainable change with respect to ESG – by making their policies and strategies personal to their employees. Without this level of personalisation, the step-change needed will not happen.

It’s critical then to ensure that sustainability is central to the employee promise and experience to make it more personal, meaningful and impactful. This will result in an increase in the proportion of motivated and productive workforce who intend to stay longer, generate a meaningful increase in the perceived value of the total experience an employer offers, and create a more positive impact on the world.

This is on the agenda for CEOs, which shows a clear need for strategic transformation, creating new circular and sustainable business models, if employees are not bought in to that it will impede progress. Organisations need to adapt to attract and motivate key talent to stay, be a more productive and engaged workforce, have better customer experiences, meet investor and regulator expectations, stronger financial returns and a more positive impact in society at large.

PwC commissioned a global survey of 5416 workers in 95 countries and regions and 19 industries. The survey polled employees across a range of salary bands, role types and working methods. The breakdown of these are below.