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By Daniel Goleman
Younger generations have been fixated for some years on the Earth’s changing climate and what that will mean over their lifetimes. Seasoned cynics might be inclined to assume a pandemic and an economic recession would be enough to detour such benevolent concerns. But they would be wise to consider the sentiment these conscientious cohorts have internalized from recent events.
Before COVID lockdowns and the emergence of the new work-from-home norm, surveys showed millennials and Gen Zers valued addressing the climate crisis as their top imperative. When the novel coronavirus upended life as we knew it and jarred the economy, it became common to see anxieties manifest as a scarcity mindset, a collective fear that there won’t be enough to go around. Yet according to data collected by several agencies just before and after the crisis materialized, those 35 and younger held steadfast in their convictions that the environment is a top factor in deciding what to buy and whom to work for. The halt on commuter traffic and intensive energy expenditures, such as operating high-rise office buildings, has shown how quickly the Earth can repair itself when the rate of environmental degradation is slowed. Witnessing wild animals roaming city streets and air-quality improvement in a matter of weeks, young people are now more hopeful than ever about the prospect of decelerating climate change.
Of course, asset management firms that are wary of climate risk, like BlackRock, have already begun shifting to sustainable investments, favoring green energy over petroleum-based ventures. But observant entrepreneurs and venture capitalists will mark opportunities beyond solar energy and electric cars and begin now to position themselves to capitalize on the coming demographic shift.
In sheer numbers, Gen Z and millennials are the biggest generational populations. The younger the age group, the more serious the concerns about the near-term consequences of global warming. One survey found that almost two-thirds of Gen Z and millennial shoppers look for products with a sustainable footprint. Almost three out of four Gen Z consumers said they would pay more for sustainably marketed products. Older shoppers, by contrast, are less keen on shelling out top dollar in the name of eco-friendly. And a bonus: Gen Zers are more likely to recommend a company or product that boasts social or environmental purpose.
It’s a clear—and from what we’re seeing, unflappable—trend toward increasing economic returns for early adopters of sustainable principles. But companies seeking to capitalize, be warned: digitally savvy consumers are also more likely to research so-called sustainable brands, ensuring that they follow through on their commitments to environmental standards. They want action and they want assurances—not glossy, feel-good green promises. Both millennials and Gen Zers say they are more likely to look for work with companies that demonstrate ecological mission and authenticity. It seems Gen Z, in particular, is unwilling to check its values at the company door, even if it comes at the cost of personal gain.
These optimistic attitudes present a novel opportunity for entrepreneurial innovation. Take Earthster, a start-up that offers to evaluate a product’s ecological footprint. Harvesting already existing life-cycle analytics, Earthster is able to track sustainability, including water consumption, toxicity, and ecosystem impact, among others, throughout a product’s entire supply chain. This cradle-to-grave comparative data includes extraction of materials, manufacturing, transportation and distribution, product use, and end-of-life disposal, so executives can experiment with variations. For instance, they can look at how transporting by boat rather than plane might improve a product’s environmental impacts—and then share that shift with customers. Even more, companies can compare their products with industry averages and incorporate those figures into their marketing.
As generations of shoppers and workers who care more about environmental impact than any other factor come of age, sustainability will become the new battleground for market share as well as talent—and maybe even provide an easy opportunity to do the right thing.