Meeting employee expectations on ESG

Wilson Chow, Global TMT Industry Leader, PwC China

The TMT industry is playing a significant role in shaping the path forward on ESG — not only for the sector, but for clients, investors, and, perhaps most critically, employees. By most accounts, TMT tops the best-of lists of companies that have embedded ESG into their operations and purpose. Microsoft, to cite just one example, has articulated one of the most ambitious and far-reaching net-zero plans in the world. The company calls its vision “100/100/0”—that on all the world’s grids, 100% of electrons, 100% of the time would be generated from zero carbon sources.

The driving force behind this sector-wide action isn’t what you think it is. The just-launched PwC Global CEO Survey found that TMT leaders are the least likely to cite “satisfying investor demands” as their rationale for making a net-zero commitment. That’s interesting, particularly in the context of recent PwC research. One major takeaway from our ESG investors survey in 2021 is that asset and fund managers are paying more attention than ever to the ESG risks and opportunities facing the companies in their portfolios, and are poised to take action. Half of the investors we surveyed, in fact, said they would be willing to divest from companies that didn’t take sufficient action on ESG issues.

But for TMT companies, one of their top motivating factors appears to be a different stakeholder entirely: Employees. According to the CEO Survey, 53% of TMT chief executives cite “attracting and/or retaining employees” as an influence in making a net-zero commitment–the highest percentage of any industry. That confirms to me that TMT companies have figured out an important piece of the ESG puzzle, and are using it to their advantage. They’ve realised that in a competitive marketplace, companies that invest in improving their ESG performance can give themselves an edge in attracting and retaining talent, especially younger talent that can grow with the organisation.

To be sure, TMT companies tend to have younger employee bases than other industries. And these employees expect their companies to take more progressive stances on environmental, social, and governance issues — and are also more likely to see themselves as ESG stakeholders than previous generations. So, naturally, TMT CEOs already know their employees and want to nurture and grow their ranks. Yet the TMT sector is harnessing a powerful tool here — ESG performance — to attract and retain quality employees, enhance employee motivation by instilling a sense of purpose, and increase productivity overall. And that can be instructive for all industries.

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Wilson Chow

Global Technology, Media and Telecommunications Industry Leader, PwC China

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