Employees and Consumers Prefer Ethical Behavior and Environmental Sustainability

Are you looking for that new disruptive innovation and business model? Awesome! In your hot pursuit of disruptive innovation, it is important to remember that the demise of many once innovative, or even long-standing brands hasn’t been a bad financial quarter. Instead, it has been disclosed unethical behavior.

Enron and Tyco immediately come to mind. But, in the past two years, we have had many more examples of companies with bad behavior, leading to a fall in their financial performance:

  • Volkswagen – Its profits are down 20% after its diesel emissions scandal.[i]
  • Uber – Lyft gained riders after a half-million Uber riders delete the Uber app.,[ii] and its market cap likely fell $10 billion.[iii]
  • Wells Fargo – Its new accounts dropped 31%.[iv]
  • Theranos – Its value fell from $9 billion to $100 million, after its blood testing scandal.[v]

The message is clear. Once you violate the public’s trust, it will hurt your top and bottom line.

The same is true for your workforce.  There is a strong body of evidence which supports that employees prefer working for employers with strong ethical behavior. These days, ethical behavior includes being champions of environmental sustainability.

Consider the following:

  • The World at Work published the results of its survey of 800 full time workers on the subject of ethical behavior. They found that 94% of respondents said it was either “critical” or “important” that they work for an ethical company. Further, 82% of respondents said they would prefer to be paid less and work for a company with ethical business practices than receive higher pay at a company with questionable ethics.[vi]
  • PWC reports in Why Millennials Matter that over half of millennials are attracted to companies with values that match their own and 56% would leave or consider leaving an employer that didn’t have the values they expected.[vii]
  • A survey of more than 2,000 people by Global Tolerance in the United Kingdom found that 42% of the workforce want to work for organizations that have a positive impact on the world. The same survey found that millennials lead this sentiment, with 62% of millennials wanting to work for a company that has a positive impact.[viii]
  • The Network for Business Sustainability found that 12 peer reviewed studies show that job seekers are attracted to organizations with sustainability practices. Why?
    • It builds a sense of pride among workers (key for employee engagement).
    • Second, employees believe if a company cares about the environment, it will also care about them.
    • Third, sustainability connects the organization’s values with job seekers’ values.[ix]

Perhaps this is one reason so many Fortune 500 companies, such as Apple, Facebook, Disney, Tesla, and even ExxonMobile and ConocoPhillips, were so harshly critical of the Trump administration’s decision on June 1 to withdraw from the Paris Agreement on climate change.

In the current U.S. economy of 4.4% unemployment and a tight labor market, employers need to remember that one of the keys for successful recruiting and employee retention is their expressed values and behavior. Employees, potential employees, and consumers are watching.

Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and is a Managing Partner of InnovationOne. He consults on innovation, global talent management, developing agile leaders and teams, and other strategic initiatives. Questions? Please e-mail Victor at victorassad6@gmail.com or visit http://www.victorhrconsultant.com. For innovation visit http://www.InnovationOne.io


[i] Julia Kollewe (May 31, 2016) VW profits down 20% after diesel emissions scandal. The Guardian. Found at https://www.theguardian.com/business/2016/may/31/vw-volkswagen-profits-down-20-diesel-emissions-scandal.

[ii] Alison Griswold, (April 6, 2017) “Lyft is capitalizing on Uber’s woes with a half billion dollars in new funding,” Quartz. Found at https://qz.com/952257/lyft-is-capitalizing-on-ubers-woes-with-a-half-billion-dollars-in-new-funding/

[iii] Anita Balakrishnan (April 25, 2017) “Scandals may be knocked $10 billion off Uber’s value, a report says,” CNBC. Found at http://www.cnbc.com/2017/04/25/uber-stock-price-drops-amid-sexism-investigation-greyballing-and-apple-run-in–the-information.html.

[iv] Laura Keller (Feb. 17, 2017) “Wells Fargo New Accounts Drop 31% as Scandal Impact Drags On,” Bloomberg Markets. Found at www.bloomberg.com/news/articles/2017-02-17/wells-fargo-new-accounts-decline-31-as-scandal-impact-drags-on.

[v] Matthew Harper, (June 1, 2016) “From $4.5 Billion to Nothing: Forbes Revises Estimated Net Worth of Theranos Founder Elizabeth Holmes,” Forbes. Found at https://www.forbes.com/sites/matthewherper/2016/06/01/from-4-5-billion-to-nothing-forbes-revises-estimated-net-worth-of-theranos-founder-elizabeth-holmes/#242602373633.

[vi] “Employees Prefer Ethical Company to Higher Pay,” (March 2007) Workspan, The magazine of World at Work. Found at https://www.worldatwork.org/workspan/Pubs/News_and_Notes-Employees_Prefer_Ethical_Company_to_Higher_Pay.pdf

[vii] Millennials at work. Reshaping the workplace. PWC (2012). Found at https://www.pwc.com/m1/en/services/consulting/documents/millennials-at-work.pdf.

[viii] Matthew Jenkins (May 2015) “Millennials want to work for employees committed to values and ethics,” The Guardian. Found at https://www.theguardian.com/sustainable-business/2015/may/05/millennials-employment-employers-values-ethics-jobs.

[ix] “Three Reasons Job Seekers Prefer Sustainable Companies,” (June 7, 2013). Network for Business Sustainability. Found at http://nbs.net/knowledge/three-reasons-job-seekers-prefer-sustainable-companies/.

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