The sustainability wage gap

The sustainability wage gap

A substantial amount of research indicates a positive relationship between a firm’s sustainable policies and its value. Nonetheless, few studies manage to identify why sustainability would translate into better financial performance. This paper suggests that firms operating in more sustainable sectors can afford to pay lower wages, due to workers’ preferences for sustainable jobs. This so-called Sustainability Wage Gap is increasing over time and larger for high-skilled workers with non-cognitive skills. As a result, firms can attract and retain talented workers and remain competitive by accommodating workers’ sustainability preferences. Download the full paper.