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Gen Z Leading Sustainability and Businesses Should Pay Attention

Gen Z Leading Sustainability and Businesses Should Pay Attention

Young people are increasingly sounding the alarm about sustainability and climate change risks. Lately it seems that the Gen Z is hearing one high pitch much better than the rest of us, including most business leaders – the alarm that Environmental, Social and Governance (ESG) are economic factors and that businesses should care to profit responsibly. It is now increasingly clear that society is in the middle of a major re-alignment of values around sustainability.

The question is whether businesses will step up and aggressively embrace sustainable practices that enables them to profit in a manner that is socially responsible and that does not cause harm to the environment or risk becoming out of step with an entire generation of employees, investors, and customers.

Gen Z comprises of those born in the late 1990s and early 2000s. This generation is not shy of speaking their truth and making their mark when it comes to their concerns about sustainability. Arguably, this boldness can be attributed to the realization that the generation and those behind it are the ones who will have to bear more of the cost of an unsustainable world. From demanding action for climate change from those in power to making eco-conscious decisions on where they spend their money or what type of company they work for; this generation is driven by changing the world for the better.

A survey by Amnesty International (2019) amongst 10,000 young people identified climate change as the most pressing issue facing the world today. The survey noted that Gen Z is aware of the impact that climate change has on the planet, livelihoods and people and are willing to adapt their behaviour accordingly to achieve a more sustainable lifestyle and ensure the future integrity of the planet.

From an investment perspective, A 2022 survey by Stanford Graduate School of Business, which polled 2,470 investors revealed sharp differences along generational lines, with younger shareholders saying they are far more eager to have fund managers pursue ESG objectives and far more willing to risk higher losses in the process. The survey noted the increased awareness by younger investors of the correlation between ESG risks and return and the power investments can have to drive positive environmental and social outcomes.

For career choices, Gen Z shows an increased desire to work in sustainable fields, holds employers more accountable for sustainability and chooses to study sustainability-related topics. Millennial Survey by Deloitte in 2021 found that 64% of 18–22-year-olds consider it important for their employers to act sustainably. Over half also claimed that they would stay with an employer longer if they acted responsibly.

While 42% said to have changed or plan to change jobs due to climate concerns and desire to work in careers that give them a sense of purpose.

Businesses need to pay attention to the influence this generation is having to sustainability. Gen Z is progressively making up the bulk pf the workforce; meaning that they are the investors and customers of today and tomorrow. Businesses cannot therefore afford to ignore their needs or undertake business as usual. Profitable and sustainable behavior will be rewarded by savvy consumers and investors.

By prioritizing sustainability in product development, using transparent messaging, considering sustainable packaging, supporting environmental causes, and engaging with Gen Z on social media, brands can effectively connect with this eco-conscious generation and build a loyal customer base

Africa is projected to be the youngest one in the world in the future. While a growing population, in general, has its limitations, a growing youth population has its perks. With the right investment in education, technology, and entrepreneurship, backed by an enabling geopolitical environment, Africa stands to reap the youth demographic dividend, to drive economic, environmental, and social growth and empowerment. Indeed, the African gift of youth populace could drive the continent to new possibilities as development leaders and change agents.

Overall, in this era of increasing urgency around sustainability, Gen Z stands out for its pragmatic and future-focused mindset that forward-looking businesses can tap into to create products and services that meet their needs.

Written by Loise Wangui
Managing Partner and ESG Lead at Protos Capital LLP,
a sustainability consultancy firm empowering businesses for sustainable growth.