Climate transition will have a profound impact on business – everyone from nascent start-ups to the biggest global corporations will have to face up to mounting pressures from customers, investors and members of the public to manage the shift to a greener economy.

The transition to net zero will be one of the biggest transformations in history. Despite high investment risks, it presents a multitude of opportunities.

But the impact that the transition will have on the talent market is often overlooked. Businesses will have to work much harder to convince a new generation of employees of their climate credentials.

Beyond purpose to action on climate change

Over the past two years, massive disruptions have transformed our lives and pushed sustainability to the top of the global agenda. A new sense of awareness and worth for the surrounding world has emerged in people. A survey of more than 3,500 employees, conducted earlier this year by Gartner, a technology research company, found that the pandemic made 56% of them realise they wanted to contribute more to society.

The notion that a business needs to articulate how it contributes to society is something that increasingly dominates our discussions with clients in the talent space.

But corporate purpose has become a tired metric for a new generation of job seekers whose overwhelming priority is the planet. A 2021 report by the Pew think tank found that Gen Z is increasingly anxious about climate change: 76% of the cohort say it’s one of their biggest societal concerns. This means that it’s actions, not words, that matter to the workforce.

Almost two-thirds of UK office workers are more likely to work for a company with strong environmental policies, according to research conducted by Censuswide, with 72% of respondents stating that they were concerned about environmental ethics. At the same time, 83% of workers reported that their workplaces are not doing enough to address climate change.

The battle for climate talent

With new data from Deutsche Bank suggesting that people are resigning at the highest rate since 2009, the climate transition poses a huge risk for those determined to attract and retain the best talent.

This battle is taking place against a backdrop of intense competition for the right talent - job advertisements related to roles focused on renewable energy are up 55% compared to 2019. And demand for talent with the skills to advance the transition cuts across industries, leading to heated competition for a relatively small employee pool.

The key here will be convincing those with transferable skills to switch to the jobs that advance the net zero transition. People are seeking careers that can drive positive change and are attracted to employers that share their environmental values and are taking meaningful action on climate change.

Overcoming the competition

Against this backdrop, what could a company do to assert its position and attract the best talent? Here are some of the strategic routes available:

1. Develop a climate-conscious employer value proposition: Without a clear narrative that explains how your company is working to limit planet warming to 1.5 degrees, your business risks setting itself up for failure. When targeting talent, focus on actions you are taking to limit climate change and make them a core pillar of the organisation’s value proposition.

2. Make credibility a core value: Credibility issues arise when words are used in the place of actions. Climate messaging that is aimed at next generation talent must align with company strategy and intention. It needs to bring together three critical elements of reputation: first, expectations of what a business or sector should be doing to address climate change; second, perceptions of what the business is doing; and third, and the reality that the business is in.

3. Don’t shy away from difficult conversations: Honesty about where the company is today and the work that is needed to achieve its climate goals can go a long way when engaging with potentially sceptical talent audiences. Acknowledging those areas where the business may be falling short and setting out a plan for improvement will encourage future talent to join you on your journey.