ESG

Gen Z is Hyperconscious of Greenwashing: What Should Brands Do When Engaging With Them?

Overhead shot of a dense forest

By Aneesh Dhawan, CEO of Knit

Having grown up in the midst of a climate crisis and navigating a pandemic early on in life, owning a strong commitment to social responsibility is part of Gen Z’s DNA. This group makes up more than 40% of the world’s consumer population. They have money to spend, but expect different values from brands than previous generations. Working, buying and engaging with organizations that align with these values is a non-negotiable for this group. Many choose to only engage with companies who are purposeful in advocating for ESG. However, data shows only 25% of Gen Zers think brands are genuine in these efforts. For C-suite executives looking to achieve authentic, long-lasting customer loyalty with Gen Zers, they need to intimately know the audience they are engaging with. Not just their values, but how they express them, the trends they care about and what it takes to build lasting trust with this group. 

Gen Zers don’t just prefer their beloved brands to be socially and environmentally conscious - they insist on it

As true digital natives, Gen Zers are more sophisticated and critical consumers of media than any generation before them. This means they are hyperconscious of any inauthentic messaging from organizations - it is also true they are hyperconscious of greenwashing. And this group isn't scared to call out a company publicly if they feel they are not being authentic. Data shows that 44% of Gen Zers will no longer even consider a brand who inauthentically partners with a celebrity or influencer to promote their products. 

For Gen Zers, authentic, genuine connection is critical to build trust. For company leaders looking to build rapport with this group, be prepared to come to the table with transparent values and be ready to back up any sustainability claims you make with data. Below are four ways to showcase authenticity when engaging with Gen Zers:

Prove it – focus on accountability in your D&I initiatives

Gen Z is one of the most diverse generations to date. They demand organizations they engage with use their influence as a progressive tool for social change. This includes a transparent D&I strategy. According to data from McKinsey, companies with greater gender diversity were 21% more likely to experience more profitability than industry competitors, and those that were more culturally and ethnically diverse were 33% more likely to outperform. Gen Zers recognize the gender and racial disparity that exists in boardrooms and have zero fear in holding those in charge accountable for change. This accountability extends past not just hiring a diverse workforce - but also creating clear paths for promotions, professional development and understanding the experiences of all employees. 

Gen Zers want to understand what values a business lives by. They see right through the inauthentic, fluffy messaging around diversity - for this group, a well-crafted D&I strategy must go beyond celebrating or acknowledging important dates and instead address systemic inequalities at the foundation. They want to feel confident the brand they are engaging with operates in a socially sustainable way. An authentic commitment to DE&I is a critical piece of that puzzle.

Be transparent with your operations

The definition of a sustainable business has broadened in recent years to mean more than just having a climate-conscious production line. For many businesses, true sustainability is solidified by embracing not just ethical practices for the climate, but also owning socially intelligent business practices from the top down. As a business leader, this means everything from investing in initiatives to better understand gender and racial biases in the workplace to dedicating resources for employee mental health. For Gen Z, coming to the table armed with an honest overview of your business operations is critical.

Gen Zers want to know that any brand they purchase is also one that aligns with their values in other areas. How does this business treat their employees? How transparent are they with their supply chain process? Data shows that nearly a third of this demographic has ‘canceled’ a brand due to a recent marketing campaign, ad, or brand affiliation that doesn't align with their values. Gen Zers are unafraid to challenge the status quo and disengage with businesses shown to operate unethically. In a competitive marketplace with more skeptical consumers than ever before, business leaders need to intimately understand the importance of maintaining transparency.

Back up any sustainability claims with data

When it comes to a brand's impact on people and the planet: language matters. Gen Zers are skeptical of any false claims as it relates to social or environmental sustainability. This group is intimately aware of the damage an organization can cause by not being transparent about their actions. The same is true when making sustainability claims. As a C-suite executive, making it a priority to avoid greenwashing isn't just the right thing to do, it’s also good business.

Regulators and policy stakeholders are increasingly holding brands accountable to substantiate their claims. EU regulations require businesses to disclose ESG data around their operations and reiterate how they manage environmental and social challenges. Law firms are also increasingly being asked to prove the data behind their clients' ESG efforts to avoid claims of greenwashing. The same rings true when looking to build trust with a hyperconscious group of young consumers like Gen Zers, make substantiate any claims of sustainability using ESG metrics such as: carbon usage, waste management policies, total water consumption or employee health and safety metrics. 

Prioritize a video-first approach

Instead of relying on still images and text in your communications, consider a video-first approach to generate trust and engagement with Gen Zers. Google data shows that 71% of Gen Zers watch on average three or more hours of video each day. The ‘TikTok generation’ watches more streaming video content than their millennial counterparts and are likely to resonate with this format. Many even use TikTok as an alternative to Google searches.

As a C-suite brand leader looking to build organic trust with a skeptical younger generation - using organic video and unedited ‘reels’ are great way to build transparency. Try to avoid overly-edited, scripted video and instead view this medium as a way to capture real-time customer reviews or even employee feedback. 

Looking ahead: empowering a young generation

As a group, Gen Z has a buying power of $44B, so it is no surprise that retailers want to understand what makes the TikTok generation ‘tick’. Appealing to this demographic comes with its own set of challenges however. One of the biggest takeaways is that true connection happens when brand leaders take the time needed to invest and understand this younger, highly skeptical generation. That means doing your homework, avoiding greenwashing at all costs and making an authentic commitment towards understanding what motivates and inspires this group. 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.