Government as an employer Government is the largest U.S. employer, so its human capital footprint is vast. 15 Protecting the health and well-being of government employees and improving DEI in the government workforce not only benefits employees, but also creates a better opportunity for employees to advance their agency’s mission and ultimately, create positive change that impacts constituents. Some 60 percent of government executives say their agencies struggle to attract, engage, and retain younger, digitally skilled talent while managing an aging workforce. 16 Governments have the opportunity to lean into a commitment and action around ESG issues that employees care about to inspire purpose and attract, retain, and engage talent. The majority of federal, state, and city government employees indicate they are satisfied with their employers’ DEI efforts. 17 However, government employees, like the general public, want to see broader impact and change around ESG from governments. B o t h f e d e r a l ( 6 3 p e r c e n t ) a n d s t a t e a n d c i t y ( 6 8 p e r c e n t ) g o v e r n m e n t e m p l o y e e r e s p o n d e n t s s a y g o v e r n m e n t s a r e n o t t a k i n g t h e a p p r o p r i a t e a m o u n t o f a c t i o n t o a d d r e s s e n v i r o n m e n t a l i s s u e s , a n d m o r e t h a n 5 9 p e r c e n t a n d 7 3 p e r c e n t , r e s p e c t i v e l y , s a y t h e s a m e a b o u t a d d r e s s i n g s o c i a l i s s u e s . 18 Environmental issues Social issues 63% 68% 59% 73% The majority of federal, state, and city government employee respondents say government is not taking the appropriate amount of action to address ESG issues. Respondents who disagree or strongly disagree that government is taking the appropriate amount of action to address: 11 Environmental, Social, and Governance: Government leadership as a catalyst for success Federal government employees State and city government employees Source: KPMG survey among U.S federal, state, and city HP W FS O N FO U
employees, n=427 Data privacy and security is the most important ESG issue for federal employee survey respondents (88 percent), followed closely by infrastructure modernization (76 percent). State and city employees report infrastructure modernization as the top issue (86 percent), followed by data privacy and security (83 percent). 19 O u r r e s e a r c h s h o w s t h a t e n v i r o n m e n t a l a n d s o c i a l i s s u e s a r e i m p o r t a n t t o e m p l o y e e s , b u t E S G a s a t e r m i s n e w t o g o v e r n m e n t , a n d m o s t e m p l o y e e s a r e n o t f a m i l i a r w i t h t h e t e r m . 20 Of those who are, they have heard about ESG mostly from the news, indicating a need for continued education and engagement on the topic. 21 Generally, federal government leadership is more familiar with ESG issues than their employees, signaling an opportunity for leadership to provide clarity and increase communication about the value of ESG throughout the agency. To embed ESG into the workforce, governments need to demonstrate a commitment to ESG both internally and externally, consider how to inspire purpose and mission in employees, and continue to modernize to better enable employees do their jobs. In addition, governments should focus on increasing ESG fluency among employees, as well as attracting and upskilling employees with ESG skillsets needed now and for the future. © 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 15 U.S. Office of Personnel Management website 16 KPMG Modern Government survey, 2021 17 KPMG survey among U.S federal, state, and city government employees 18 Ibid. 19 Ibid. 20 Ibid. 21 Ibid.