In today’s corporate landscape, Environmental, Social, and Governance (ESG) performance is no longer just a concern for investors and regulators—it’s also shaping how companies attract and retain talent. Nowhere is this shift more evident than in Singapore, where a growing number of employees, especially Millennials and Gen Z, are prioritising purpose-driven work. For companies striving to stay competitive in Southeast Asia’s innovation hub, strong ESG scores can be a decisive factor in minimising turnover and maintaining a loyal workforce.
This article explores the correlation between ESG scores and employee retention, backed by real data and examples from Singapore’s fast-evolving job market.
Why ESG Scores Matter to Modern Employees
Redefining Corporate Values
Employees today want to work for organisations that align with their personal values. ESG scores give a measurable way to assess a company’s commitment to:
- Reducing carbon emissions and environmental impact
- Fostering diversity and ethical labour practices
- Maintaining strong governance and transparency
A high ESG score signals that the company is ethically responsible, which resonates with socially conscious talent.
Singapore’s Workforce Demands Purpose
A recent survey in Singapore revealed that 72% of younger employees would consider leaving an employer that failed to demonstrate a clear ESG strategy. These employees want more than perks and promotions—they’re looking for a company with purpose.
The Data Behind ESG Scores and Retention
Lower Turnover in High ESG Firms
Research from global consulting firms such as McKinsey and BCG has shown that companies with high ESG ratings have up to 25% lower employee turnover rates compared to their lower-scoring counterparts. This trend is evident in Singapore’s finance and technology sectors, where ESG initiatives are now a core part of HR strategy.
Increased Employee Engagement
ESG-integrated companies in Singapore report higher employee engagement scores. Engaged employees are more productive and more likely to remain with their employer, reducing hiring and training costs over time.
For example, DBS Bank has integrated sustainability goals into employee KPIs and has seen a measurable improvement in both retention and engagement metrics.
ESG Practices That Directly Impact Retention
Environmental Responsibility
Singapore is known for its commitment to environmental sustainability, and local employees are taking notice. Companies that implement green initiatives such as energy-efficient offices, carbon neutrality goals, and sustainable supply chains earn employee trust and loyalty.
Green certifications (such as BCA Green Mark) are not just branding tools—they influence staff satisfaction. Employers that take visible steps to reduce their environmental footprint often see improved morale and reduced attrition.
Social Initiatives and Inclusion
Diversity, equity, and inclusion (DEI) are a key component of ESG. Companies in Singapore that have comprehensive DEI programs, such as parental leave, equal pay, and leadership training for underrepresented groups, are more likely to retain talent across all demographics.
Case in point: UOB’s Women’s Initiative Network has helped the bank create a more inclusive workplace, resulting in higher female retention rates and stronger internal promotions.
Governance and Transparency
Strong corporate governance—including clear policies, fair treatment of employees, and open communication—builds employee trust. When governance practices are transparent, employees feel more secure in their roles and more confident in leadership.
In Singapore, companies listed on the SGX are increasingly required to disclose ESG metrics, which promotes accountability and can directly improve internal trust.
Challenges Companies Face
Greenwashing Risks
Employees are increasingly savvy and can spot insincere ESG claims. Companies that greenwash—by exaggerating their ESG impact without measurable action—risk losing credibility and employees.
Singaporean talent, especially in sectors like fintech and legal services, are well-informed and expect honest, data-driven reporting on ESG progress.
Implementation Gaps
While many Singapore-based firms commit to ESG on paper, the actual implementation can lag behind. Without a clear plan, employee enthusiasm can wane. To prevent this, businesses must embed ESG into day-to-day operations—not just annual reports.
Conclusion
In Singapore’s competitive labour market, ESG scores are becoming a critical part of the employee value proposition. Companies that invest in robust environmental, social, and governance practices not only build public credibility—they also create a workplace that attracts and retains high-performing, purpose-driven talent.
As the data continues to show, ESG isn’t just good for the planet or for shareholders. It’s also one of the smartest long-term retention strategies a company can adopt.
