Last updated April 22, 2024

An eco-work ethic? How sustainability influences employee engagement

Earth Day shines a temporary spotlight on social impact and sustainability, but as concerns about climate change and environmental issues intensify, these concepts are becoming increasingly important to company culture all year long. The growing focus on sustainability is partially driven by employee demand – and it affects where today's talent chooses to work.

A 2023 Deloitte survey of nearly 23,000 employees found “55% of respondents reporting that they research brands’ environmental impact and policies before accepting a job, and more than 40% reporting that they already have, or plan to, change jobs due to climate concerns.” Those are big numbers. If job candidates are taking environmental policies into account before accepting a role, companies ought to take the matter seriously.

At Culture Amp, we do take environmentalism seriously – both internally and externally. In fact, we’re releasing our Net Zero plan.

In this article, we’ll dive into the relationship between sustainability and employee engagement and share how we demonstrate our genuine commitment to social impact.

First, let’s look at the research.

We set out to see if survey responses to questions on sustainability and social impact translate to actual behavior. Specifically, do companies that focus on sustainability have more highly engaged employees?

Setting science-based targets creates a modest 2% bump in engagement

We looked at data from 109 Culture Amp customers who are taking action on climate change by setting science-based targets. Across responses from 243,235 employees, we found a small but meaningful difference: These companies are 2% points higher on engagement than a control group (matched by industry, region, company size, employee tenure, and employee age). The largest impact is on employee commitment, with employees at companies with science-based targets being 4% points more likely to see themselves working there in two years’ time. This boost in commitment suggests a direct link between environmental action and workplace loyalty.

Unsurprisingly, the mere act of setting targets pales in comparison to the impact of perceived authenticity in a company's environmental efforts. Employees look internally for evidence of greenwashing – “the act or practice of making a product, policy, activity, etc. appear to be more environmentally friendly or less environmentally damaging than it really is." And it turns out that employees’ antenna for greenwashing influences how engaged they are at the company.

While setting targets is good, having a genuine commitment is better

Employees at companies deemed genuinely committed to sustainability reported a substantial 16% increase in engagement levels. This effect was consistent across demographics, with only slight variations among different age groups, highlighting the universal appeal of genuine sustainability commitments. Given that this data stems from over 1000 companies and nearly 400,000 employees worldwide, we’re taking it with more than a grain of salt.

When employees perceive their company to have a genuine commitment to sustainability, they are far more motivated to go above and beyond, more committed to staying in the long and short term, and more enthusiastic about the company overall.

These findings reflect a broader trend, says Ella McKinley, Sustainability Lead:

“Employees are wise to greenwashing and want to see real action over surface-level commitments. What we’re seeing is employees holding companies to an increasingly high standard on sustainability. They want to see real action and leaders who are authentically invested in making a difference.”

Commitment to sustainability matters to people of all age groups

The connection between sustainability and engagement does not appear to be generational. Looking at the differences by age, we expected to see Gen Z employees most motivated by a genuine commitment to sustainability and social impact. While that was the case, their responses were not significantly different from those of Millennials. Employees of all ages saw a boost in engagement if the company was genuinely committed, but those over 65 had the smallest boost.

Commitment boosts engagement for all ages

These findings are not surprising to Andrew Davies, the CEO of B Lab Australia & Aotearoa New Zealand. He says,

“As employees expect more meaningful action on sustainability from their employers, B Corp Certification differentiates leading companies that are transparent and accountable for the impact they have on people, planet, and communities. Certified B Corps go beyond sustainable products and pledges, using the B Impact Assessment framework to measure, manage and improve their holistic impact across every area from governance to customers, workers, communities and the environment. This research from Culture Amp reflects what we have known for a long time, that setting targets is just the beginning, and that companies need to be genuinely committed to continuous improvement.”

That said, companies who are surveying their employees about social impact and sustainability are likely ahead of the game.

Three-quarters of companies don’t know how employees perceive their sustainability commitment

While the data shows that employees’ perceptions of a company’s sustainability commitment are important, most organizations are not asking for this information.

Globally, across Culture Amp’s 6500+ customers, only 27% of surveys include the question “[Company]'s commitment to social responsibility (e.g. community support, sustainability, etc.) is genuine.” And we see regional differences:

37% of Australian employees are asked
26% in UK and Germany
28% in the US

Companies whose work is closely tied to climate change or its impact are most likely to ask about employees’ perceptions of their climate commitment. This includes construction and heavy industry, manufacturing, and logistics and transport. While tech companies are often seen as progressive and forward-looking, they are least likely to ask about commitment to sustainability and social impact.

Construction leads by industry in asking about corporate social responsibility

As we synthesize these insights, several themes emerge. Firstly, the data underscores the importance of authenticity in sustainability efforts. Employees are not just looking for token gestures but meaningful actions that reflect a deep-seated commitment to sustainability.

Secondly, industries’ role in shaping the sustainability conversation highlights the potential for cross-sector learning and collaboration. The proactive stance of the construction industry, in particular, suggests that sectors traditionally not associated with environmental leadership can, in fact, spearhead significant change.

Moving from insight to action on sustainability

How do we move from insight to action? The answer lies in taking a holistic approach that integrates genuine commitment with strategic communication and tailored engagement strategies. Companies must ask themselves tough questions about the authenticity of their sustainability efforts and seek feedback from their most valuable asset: their employees.

How can companies convince their employees that their commitment is genuine? What might they do to improve employee engagement through social impact?

Carmen Wong, Board Chair for Culture Amp’s ERG focused on sustainability, shares her take:

“It comes down to having a really clear mission, being transparent in what you do, leading by example from the top, and giving back to the community (ie, partnering with a non-profit, donating, etc.).”

She goes on to highlight that bringing like-minded people together may not be enough. She says,

“It’s one thing to simply have a space for folks to come together and talk about such topics; it’s another thing to see leaders really support this initiative, show up to events, and talk about the importance of having a Net Zero plan.”

For Carmen, the icing on the cake comes from leaders who openly talk about and sponsor personal or company-wide sustainability efforts. She adds:

“It was really great to see our Exec Sponsor, Will Werhane, share with us how he commits to a more green lifestyle and how he educates his family. This not only shows that he supports our cause as an ERG, but through these genuine conversations, we understood where he stood with regards to the climate crisis and how he was showing up as a father, a husband, and a senior leader.”

Consider organizing team service days

If your company is looking to take one low-effort, high-impact action to demonstrate a greater commitment to environmental efforts, our data points to team service days.

Companies that implemented team service days – giving employees a day off once per quarter to volunteer – improved 15% points on “[Company]'s commitment to social responsibility (e.g. community support, sustainability, etc.) is genuine.” Agreement rose from 67% prior to implementing to 82% after.

In this era of heightened environmental consciousness, the path forward for organizations is clear. Beyond mere compliance or marketing strategies, a deep, genuine commitment to sustainability can transform workplace dynamics, drive engagement, and position companies as leaders in the global effort to forge a sustainable future.