Companies are making their move towards reaching their ESG goals. In Malaysia, the National Sustainability Reporting Framework (NSRF) will be implemented in phases starting in 2025 to help Malaysian companies improve their sustainability reporting. This will help companies improve their sustainability reporting and align with international standards.
This is aligned with the younger generations for their expectation on business to demonstrate transparency in their sustainability efforts. They want companies to take accountability for their environmental, social, and governance (ESG) practices. For that reason, understanding the motivations of younger generations has become important to gain their trust and loyalty.
1) They care about the money they spent on
Both Millennials and Gen Z are mindful of how they spend their money, but their approaches differ slightly. Millennials value experience and buy products which they considered worth to spend on. However, Gen Z is more critical about the way they spend their money. They are even judging Millennials’ spending habits, viewing them as wasteful, since Millennials are more influenced by peer-driven purchasing decisions. Unlike Gen Z, they are more more influenced by practical, financially secure choices.
Despite these differences, both generations share similar priorities in where they allocate their money. Studies show that both generations prioritize experiences and are more willing to spend money on them rather than on material possessions. Trends like soft-saving and underconsumption have influenced their spending behaviors, setting a clear example of their financial mindset.
2) They are not feeling financially secure
Despite their increasing concern for sustainability, both Millennials and Gen Z face significant financial insecurity. According to a Deloitte’s 2024 Gen Z and Millennial Survey report, nearly a third of Gen Zs (32%) and Millennials (31%) expect their country’s economic situation to improve within the next year. While this shows a cautious optimism, financial insecurity remains a persistent issue.
Living paycheck to paycheck is a common experience for both generations, with 56% of Gen Zs and 55% of Millennials reporting this struggle. Even though some are optimistic about their personal finances—48% of Gen Zs and 40% of Millennials expect improvement in the next year—many still do not feel financially stable. About 30% of Gen Zs and 32% of Millennials express that they do not feel financially secure.
The rising cost of living is their most pressing concern, far outweighing other issues like climate change, unemployment, mental health, and personal safety. This financial instability not only affects their daily lives but also shapes how they approach spending and saving, often forcing them to make practical, cost-conscious decisions.
3) They care about climate change
Millennials and Gen Z are both equally care about what happen with environment. Unlike other generations, Millennials and Gen Z are not just passive observers; they actively seek ways to make a positive impact on the environment through their choices and actions. To them, it is urgent to address climate change and are vocal about their concerns.
Few years back then, they are even involved with activism to voice out their concerns. The Pew Research survey found that Gen Z is especially anxious about the future when they see content about climate change online. Only a smaller majority of Millennials feel the same way.
Both generations prioritize sustainability in their purchasing decisions, often choosing products and companies that demonstrate eco-friendly practices. For instance, they would prefer brands that offer sustainable fashions and adopting reusable products such as shopping bags, clothes, and water bottles. This makes them to support policies that help protect the environment and encourage businesses to take real steps to fight climate change.
4) They feel businesses don’t care about their societal impact
According to a similar report by Deloitte, many Millennials and Gen Z are skeptical about how much businesses care about their impact on society. While they feel positive about their own employers—67% of Gen Zs and 69% of Millennials are satisfied with their organizations’ social contributions—less than half believe that businesses, in general, make a positive difference. Specifically, only 49% of Gen Zs and 47% of Millennials think businesses have a good impact on society.
This shows a gap between what these generations expect from businesses and what they actually see. They want companies to take active steps to tackle important issues like climate change and social inequality. For example, 65% of both generations believe businesses should help protect the environment and ensure that new technologies are used ethically.
Additionally, many believe that businesses should promote social equality by ensuring equal pay and creating inclusive job opportunities. This frustration comes from their perception that businesses often focus more on profit than on making a positive impact. Due to this skepticism, Millennials and Gen Z prioritize sustainability, looking for organizations that share their values and show real commitment to social and environmental responsibility.
Conclusion
Millennials and Gen Z are increasingly focused on sustainability due to their financial situations, environmental concerns, and desire for corporate accountability. Despite being skeptical of businesses, both generations want companies to take real action on issues like climate change and social inequality. By understanding what drives Millennials and Gen Z, companies can build trust and loyalty while addressing societal challenges. Sustainability is not just a trend; it is essential for creating a better future that aligns with the values of younger generations.
