The push for businesses to adapt and adopt
Investors, customers and employees are pressuring executives to publicly and visibly walk the walk on climate change.
Shareholders are increasingly recognizing that climate change is bad for business and are pressuring companies to analyze their climate risk or reveal their carbon footprints. The Wall Street Journal reported that in 2019, the number of climate-related shareholder proposals in U.S. companies jumped to more than 75, up from just 17 proposals in 2013.
According to Bloomberg, "Adding to the pressure is the Climate Action 100+, a group of 320 investors that manage more than $33 trillion in assets that's demanding companies adhere to the Paris targets."
Customers demand sustainability
Nielsen studies have shown that more than 80% of customers "feel strongly that companies should help improve the environment. This passion for corporate social responsibility is shared across gender lines and generations. Millennials, Gen Z and Gen X are the most supportive, but their older counterparts aren't far behind."
...over 90% of millennials say they would switch brands for one which champions a cause.
Alan Jope, CEO, Unilever
This sentiment has helped boost Unilever's Sustainable Living Brands, which grew 69% faster than the rest of the business in 2018, compared to 46% in 2017. Sales of these more sustainable products delivered 75% of the company's growth in 2018.
According to Unilever CEO Alan Jope, "Two-thirds of consumers around the world say they choose brands because of their stand on social issues, and over 90% of millennials say they would switch brands for one which champions a cause."
Employees raise their voices
In 2019, thousands of Amazon employees signed a letter to CEO Jeff Bezos and the company's board of directors, asking for broad action to fight climate change. They pointed out that Amazon's action on climate hasn't come close to the level of ambition and innovation that the world expects of its largest internet retailer and cloud computing company.
As BlackRock CEO Larry Fink wrote in his annual letter to executives, "contentious town halls" where employees speak up about the importance of corporate purpose are becoming a fact of life. "This phenomenon will only grow," Fink predicted, "as millennials and even younger generations occupy increasingly senior positions in business."
A prosperous future for all
Nearly 40% of millennials — who will represent one in three workers by 2020 — have chosen a job because of its approach to sustainability. This young workforce expects employers to have a strong environmental agenda and expects CEOs to take a leadership role.
With pressure mounting on corporate America to address environmental impacts, businesses will need to adapt or get left behind. Perhaps the biggest opportunity lies in the cutting-edge tech businesses are already investing in to stay competitive. As companies move from early adoption to successful implementation, they would do well to use the same innovations for reaching their sustainability goals.
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