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After firing 28 employees for protesting in favor of Palestine, Google's CEO declared the company shouldn't get distracted by politics because after all, "Google is a business." This clear commitment to a company's purpose has been praised, but it hides an uncomfortable reality—businesses are already deeply engaged in politics. So how does a company handle employees who want them to use their political influence for good?
The 2023 story at Google was layoffs, but now it seems to be low employee morale, a clear signal that the war for talent is still on. The U.S. labor market still has 8.8 million open positions. That's nearly 1.4 openings for every unemployed worker. U.S. employers are spending $2.9 million every day to find new workers. The pinch is only getting worse, with projections of a global talent shortfall of 85 million jobs by 2030, costing the economy $8.5 trillion in missed revenue.
But getting the right employees in the door is only the first step; keeping them motivated also poses a major challenge. According to the latest Gallup survey data from February 2024, worker engagement has reached a low not seen in over a decade, with an upward trend of "quiet quitting"—putting in the minimum effort required—especially among Gen Z and millennial workers. This also comes at a real cost—compared with a highly engaged workforce, a company with a low engagement will suffer 21 percent lower revenue.
A Pew Research Center survey in 2021 found that 67 percent of Gen Z adults and 71 percent of millennials think that addressing climate change should be top priority. Moreover, 37 percent of Gen Z and 33 percent of millennial adults say that climate change is their top personal concern.
Superficial sustainability won't cut it as internet-savvy talent can investigate a company's sustainability claims and call out greenwashing when they see it. In fact, 75 percent of Gen Zs state that when a company takes a public stand on issues, they will research whether the companies' actions live up to their words.
The pressure continues from the recruiting phase and into the workplace. Employees increasingly challenge their companies to strengthen climate commitments. Fifty percent of Gen Zs and 46 percent of millennials report that they and their colleagues are pressuring businesses to take action on climate change, and executives are feeling the heat. In a 2023 survey of over 2,000 C-Suite leaders, more than half reported that, within the past year, employee activism on climate issues has led their organizations to increase their activities related to sustainability, with 24 percent reporting a substantial increase.
One area where companies may be exposed to accusations of greenwashing and to employee discontent is political engagement. How is the company engaging on policy issues—such as through lobbying, political donations, and public relations—and is this engagement aligned with their climate commitments?
This critical lever for a company's climate impact is coming into increasing focus. The Center for Political Accountability has highlighted 75 companies undermining their climate commitments through political spending, and the think tank InfluenceMap monitors and scores the climate policy engagement of 500 companies. Institutional investors are also weighing in, with the Interfaith Center on Corporate Responsibility (ICCR) launching a raft of shareholder resolutions calling for companies to align their lobbying with the carbon reduction goals established in the Paris climate agreement.
Even companies without active policy engagement on climate issues may find themselves involved through third parties and trade associations. InfluenceMap has detailed the historical and ongoing obstructionist role of the U.S. Chamber of Commerce on climate issues, which conflicts with the pro-climate stance of many of its members; and the organization F Minus tracks how many lobbyists for pro-climate organizations simultaneously lobby for fossil fuel interests.
ClimateVoice, which brings together employees who want their companies to lead on climate policy engagement, reached over 21,000 employees last year. The student organization Change the Chamber has built a coalition of over 100 student chapters focusing specifically on shifting the U.S. Chamber of Commerce toward a Paris-aligned policy approach.
University of Michigan's Erb Institute created Principles for Corporate Political Responsibility to serve as a foundation for a principled approach, including, critically, how to decide whether to engage on an issue. For companies where climate change is a priority topic, the AAA Framework offers guidance for what effective engagement on climate policy looks like. Meanwhile, the ICCR has issued a detailed best practices guide for communicating climate policy leadership to shareholders.
Grappling with the complex trade-offs in policymaking is always difficult and often heated. Nevertheless, the rewards for companies that manage it well will be substantial—ensuring a consistent, deeply embedded commitment to climate action can create a genuine connection to the Gen Z and millennial workforce, reducing turnover, and increasing productivity through meaningful engagement. The time for action is now.
Amy Gobel is senior scientist of emerging technology at Johnson & Johnson Innovative Medicine and co-founder of Alliance for Responsible Capitalism.
The views expressed in this article are the writer's own.
