By pushing forward their environmental agenda, younger consumers are actively influencing consumption patterns and business operations. According to a recent survey by First Insight, 64 percent of Gen Z and Millennial respondents stated they actively attempt to purchase from eco-friendly companies. In addition, the study also reports that 54 percent of younger consumers are willing to spend more on eco-friendly products. Compared to their predecessors, only 34 percent of Gen X and 23 percent of Baby Boomers responded similarly. It appears that with each new generation, the quest for environmental change strengthens.
If going off headlines alone, it would seem that younger consumers have been financially responsible for uprooting entire industries. Although the narrative is a sort of hyperbole, it is undoubtedly rooted in a pocket of truth regarding single-use items like plastic straws. It isn’t as if younger consumers have a personal grudge against specific industries. Instead, the arguments we see presented across headlines can be attributed to a change in interests and beliefs. As we’ve seen throughout recent years, Millennials and Gen Z are more environmentally conscious than their predecessors.
Regardless of where one stands on the issue, the ongoing environmental damage caused by corporations of all sizes will ultimately affect everyone. While every business’s goal is to turn a profit, there has been a growing sense of corporate social responsibility to rectify decades of negligence regarding ecological footprints. But with younger consumers demanding greener businesses and America’s wealth transitioning into the hands of younger generations, companies can no longer treat the environment as an afterthought. As a result, we believe that the industry leaders we will see emerge throughout the coming decades will be those that understand the need for profit while actively promoting greater environmental conscious efforts.
Over the last couple of years, we’ve seen industry leaders announce climate initiatives, pledges, and environmental goals to meet the younger generation of consumers’ demands and to create a positive reputation for their organizations. Here are a few that have caught our eye.
Delta Air Lines: Being the first American airline to recycle single-use products on flights, Delta Air Lines has long been a leader in aviation environmental activism. In March of 2020, Delta Air Lines committed to investing $1 billion over the next ten years to eliminate all of its fossil fuel emissions. Through these investments, Delta will develop projects to advance clean air technology, reduce carbon emissions, and incorporate practices that will enable the company to become the first carbon-neutral airline globally.
As an airline company, Delta has also long invested in carbon offsets which help fund projects that reduce global greenhouse gas emissions. For Earth Day 2019, Delta purchased 50,000 carbon offsets, which offset the emissions required to fly over 300,000 people. Delta even allows individuals to buy carbon offsets online alongside their tickets, helping to place accountability on consumers as much as the company itself.
In their annual ESG report for 2020, Delta stated that travelers should not have to “choose between seeing the world and saving the world.” Key environmental initiatives found within the report are as follows:
- In 2020, Delta retired over 200 aircraft ahead of schedule to add more fuel-efficient aircraft.
- Delta, on average, had 6 percent more fuel efficiency per seat during 2020 than 2019, which helped save 117 million gallons of fuel due to fleet retirements and reduced passenger loads.
- Delta is investing in sustainable aviation fuel (SAF) with plans to replace 10 percent of its fossil fuel reliance with SAF by 2030.
Patagonia: With its 1 percent for the planet initiative, the American clothing company Patagonia has been a leader in the corporate-funded fight against climate change for decades. Since 1985, Patagonia has pledged 1 percent of its sales to preserve and restore the natural environment. According to their website, 100 percent of Patagonia’s electricity needs are met using renewable energy in the United States. In addition, the company has awarded over $140 million to domestic and international environmental groups.
Unlike other companies, Patagonia has placed equal amounts of its environmental protection practices in both its business operations and the hands of its consumers. Rejecting the idea of “fast fashion,” the company has gone as far as discouraging its customers from purchasing too many of its products through a “don’t buy this jacket” campaign meant to highlight the issues of over-consumption. Adding to its efforts of producing products that last, Patagonia has a repair and reuse program that encourages customers to send in damaged products for repairs rather than purchasing a replacement.
Patagonia has long set forth a blueprint for companies to increase their climate initiatives. Its progressive eco-friendly ethics have created a widely favored culture across all generations, allowing the brand to be an industry leader in the fight against climate change.
Amazon: In 2020, Amazon debuted a $2 billion Climate Pledge Fund to invest in companies dedicated to building products, services, and technology to decarbonize the Earth. The fund will help make The Climate Pledge, a 2019 commitment between Amazon, Global Optimism, and other companies to meet the goals of The Paris Agreement 10 years early, possible.
To meet The Paris Agreement 10 years ahead of schedule, signatories of The Climate Pledge will need to reach net-zero carbon emissions across all areas of their businesses by 2040. Key signatories of Amazon’s pledge include Salesforce, IBM, Procter & Gamble, Visa, Microsoft, and Verizon.
In their annual sustainability report for 2020, Amazon stated that the company is “committed to building a sustainable business for our planet” by reaching 65 percent renewable energy across all of its operations. Amazon hopes to be fully renewable energy reliant by 2025.
HP: Earlier this year, HP announced some of the most aggressive and comprehensive climate goals in the technology industry. While we’ve seen many companies promote climate initiatives throughout recent years, HP has a long history of developing sustainable practices before it was a fashionable PR move. For example, HP implemented a hardware recycling program back in 1987 and was one of the first companies to sign on to the well-known Energy Star efficiency program.
For Earth Day 2021, HP announced its specific targets and timeframes to advance its environmental efforts. Over the next twenty years, the company plans to:
- Reach net-zero carbon emissions across its entire value chain––which includes its operations, supply chain, and customer use of products––by 2040.
- Achieve a 50 percent reduction in value chain greenhouse gas emissions by 2030.
- Maintain zero deforestation for HP paper and paper-based product packaging.
- Go beyond its own responsibility by investing in forest restoration to counteract deforestation for non-HP paper used in their products or print services.
Apple: Apple has famously announced its efforts to eliminate its contributions to climate change within the decade, stating its goal of becoming carbon neutral by 2030 across its supply chain and products. The tech giant aims to slash its greenhouse gas pollution by 75 percent to achieve this feat.
Apple has committed itself to being entirely reliant on renewable energy and has even extended this promise to include its suppliers, with over 175 suppliers committed to adopting renewable energy. In total, Apple, alongside its suppliers, will bring online more than “9 gigawatts of clean power around the world,” according to an October press release. These actions will help prevent over 18 million metric tons of CO2 emissions from entering our atmosphere––the equivalent of removing 4 million cars off the road each year.
For companies, the necessary pivot towards developing vital climate initiatives goes beyond satisfying consumer demands. Regarding profits, studies have found that the active development of eco-friendly programs results in a higher return on equity both in the short and long term. Furthermore, it is in a company’s best interest to develop these practices to attract the best young talent in their respective industries.
In a Fast Company survey, 70 percent of respondents stated that they prefer to work within a company with a solid climate agenda and would even take a reduced salary to do so. As research shows, this shift in thinking will only continue to sway towards more robust climate action with each new generation.
With increased pressure, companies must embrace eco-friendly practices as a necessary evolution in business operations. Accepting their environmental responsibility will help companies drive growth and promote longevity with the younger generation of consumers, but only if companies fully commit and integrate those practices across all functions of their business model. Using industry leaders such as Delta, HP, and Patagonia as guides, the path forward has already been presented for those looking to focus on improving their environmental impact.
Keeping up with ongoing market changes brought on by younger generations will require executives to reevaluate their business operations. Understanding that change is collaborative, Executives Unlimited has years of experience helping companies find and recruit executive talent that meets their current and future leadership needs. With a global roster of clients ranging from companies across multiple industries, Executives Unlimited will continue to play an active role in helping companies safeguard their presence through effective change.