The “Sustainability Generation” Is Taking Root in the Gulf: How to Leverage Gen Z to Power ESG Progress in the GCC
Gen Z is swiftly upending business as usual. Whether it’s reestablishing how companies approach consumers or reinventing corporate culture, this generation is transforming the impact of the labor force. Since Gen Z is expected to account for more than a quarter of the world’s workforce by 2025, this trend is likely to accelerate. The changing tide is particularly acute in emerging markets such as Asia, Africa, Central and Eastern Europe, and Latin America where youth account for more than one billion of the entire population. In the Gulf, particularly, Gen Z is emerging as a key stakeholder group—and it is time more Gulf-based companies took notice as younger workers rise in the ranks.
Resoundingly, youth across the world want to work for businesses with a strong commitment to sustainable and ethical values. Like their global peers, Gen Zers in the Gulf are no exception. This poses major opportunities for companies hoping to build a competitive edge in the Gulf. However, a recent report published by APCO Worldwide and the GCC Board Directors Institute (GCC BDI) finds that Gulf-based companies haven’t yet capitalized on this shift despite the shortage of skills and talent accelerated by the Great Resignation. Today’s environmental, social and governance (ESG) challenges are complex, interconnected and fast-moving. Gulf-based companies should internally match and adapt to this external momentum if they wish to resolve the talent shortage and increase organizational value.
Alongside the integration of ESG, talent development is another prime area of opportunity for companies in the Gulf. Likely a result of delayed regional investment in the education-to-workforce pipeline, there is a surplus of untrained youth. Gulf-based organizations can take a solutions-oriented approach by activating educational resources, forming partnerships and cultivating internship opportunities for youth looking to gain skills and experience before entering the workforce.
Without investing in pre-career development or integrating Gen Z’s demands for continued corporate commitments to sustainable and equitable progress, the opportunity to address the hiring gap and create visible organizational value is at risk. But to realize the full skill set and potential of young professionals, GCC companies should accelerate a full-scale approach.
- Ensure that business positions on sustainability and ESG are transparent and consistent. Advancing progress requires transformation across the entire enterprise. Organizational decision-making can no longer be solely based on statements and visions as stakeholders increasingly demand data and communications that reflect a track record of impact. While there is no perfect way to lay this path, Gulf-based organizations that implement clear, standardized and high-quality reporting can help Gen Z talent understand their company’s sustainability and social impact trajectory, while also building trust and illuminating opportunities for strategic alignment within the business framework. Although reporting is still voluntary for a sizable portion of companies within the Gulf region, APCO found that many companies are taking action: 70.6% of respondents at public companies said that they report on ESG while 42.9% of private companies said the same. The report also revealed that a lack of transparency demonstrated by some companies does not necessarily reflect GCC companies’ commitment to addressing ESG priorities as many private organizations are reporting internally. Gulf-based companies that engage in public reporting are more likely to be able to attract and retain Gen Z talent because youth today desire to work for organizations that they can hold accountable.
- Promote career development by enhancing access to learning programs that build ESG-related skills and capabilities. Despite a growing global demand for ESG analysts, strategists and specialists, the GCC region has yet to develop a deep bench of talent. When it comes to the day-to-day management of ESG within the organization, only 26.6% of surveyed companies have a specialized ESG team that sits under one function/business unit. Instead, 58.8% of respondents noted that the responsibility for setting and adhering to ESG priorities lies primarily with the CEO. The lack of dedicated ESG positions and teams signals that there is a profound need to address internal governance. Early investment in young career development and a restructuring of the talent model can unlock the opportunity to tackle this head-on. By hiring and training the next generation of professionals on everything from data collection and dissemination to integration of ESG into business strategy, GCC-based companies can enhance their capabilities to develop strategic ESG functions with clear internal governance.
- Implement and invest in purpose-driven programs that reaffirm environmental and social commitments. New talent and existing employees are critical partners in any company’s ESG journey. Beyond statements, these stakeholders look for embedded processes that reinforce company-wide commitments. For example, programs like employee resource groups, volunteering and giving teams effectively build culture and facilitate how to communicate the ESG journey amidst shifting expectations. Programs as such reinforce visible organizational value by providing opportunities for talent development, as well as creating a connective and supportive environment. GCC companies appear to be on the path to integrating these demands, as the ESG processes and operations of respondents’ organizations were supported by corporate social responsibility (75%), performance management (51.3%) and HR practices (40%). By prioritizing purpose-driven processes and operations, Gulf-based companies might interrogate where they have gaps and how they strengthen their relationship with talent.
The dawn of disruption is here. It’s time to take action. Being open to fundamentally changing the structure of how your company hires, manages and retains talent can be difficult—especially for companies that are just at the beginning of their ESG journey. However, failure to invest in pre- and early-career development or act on Gen Z’s demands for sustainable and ethical business practices can put enterprise value at risk, particularly in a region like the Gulf that has a high youth population. Taking steps to strategize a clear course of ESG implementation, in combination with developing strong career growth programs across the entirety of a company, is necessary to fully realize the potential of young professionals within the region. By investing in the youth of the region, the Gulf has the potential to bridge the talent and skills gap, as well as strengthen the workforce of the future.