|WEF founder Klaus Schwab recently described COVID-19 as “a litmus test for stakeholder capitalism.” |
Young people, in particular, are expecting more from companies during this time of crisis. A survey by JUST Capital and The Harris Poll found that 58% of young people believe companies need to better support the health, safety and security of their workforce in light of COVID-19. This is 10% higher than the response from those that are 35 and older.
Even prior to the pandemic, there were signs that this new generation was paying closer attention to environmental, social and governance issues. (“ESG”) For instance, one study shows that nearly half of millennials have been vocal, either in supporting or criticizing their employer, regarding its actions in connection with a social issue of significance. Young people are also considering these factors when purchasing goods and voting on political matters. Gen Z is likely to follow in their footsteps.
Firms embroiled in culture or misconduct-related scandals may be particularly vulnerable in this context. The current generation of schoolchildren and young adults will be the next generation of voters, workers and consumers. That shift will also come with higher expectations for businesses. What remains to be seen is if businesses will rise to the challenge or wait until they are forced to react after scandal erupts and value is lost.