Environmental and CSR initiatives are having a direct impact on firms' attractiveness to potential new recruits and are a determining factor in employee retention and engagement rates.

That is the view of the Chartered Institute for Personnel and Development (CIPD), the UK's leading professional body for HR execs, which argues that green initiatives are being held in higher regard by firms' employees than customers and as a result have become a key battleground in the war for talent.

"Our view is that although customers like to see good CSR, purchasing decisions are primarily determined by value for money," said Mike Emmott, adviser for employee relations at the CIPD. "But when people are choosing where to work and where they are going to invest a huge amount of their time and energy they are really influenced by green issues."

Recent CIPD research found that over half of people would prefer to work for a company with a strong environmental policy, while a similar proportion identified green credentials as a factor when looking for a new job.

"CSR is part of a package of things business can do to recruit and retain good people," said Emmott. "It is not the only issue, but it is a major factor. "

He added that strong environmental initiatives could have a "profound impact " on a firm's competitiveness. "Green issues are often seen as impacting retention, but that is a rather neutral term and they can also have a big impact on not just retention but also employee engagement," he explained. "By that we mean not just job satisfaction, but how committed and engaged an employee is with a company – research shows that where engagement is high absence and stress are lower and productivity is higher."

Emmott was speaking in the wake of two recent US surveys released this month highlighting the close links between environmental policies and recruitment and retention rates.

A survey of over 4,000 people carried out by recruitment job site MonsterTRAK and released to coincide with the launch of its new GreenCareers recruitment service found that 80 per cent of young professionals are interested in securing a job that has a positive impact on the environment. Meanwhile, over 90 per cent claimed they would prefer to work for an environmentally friendly employer.

The survey was followed by a major report last week from recruitment and retention consultancy Kenexa which argued that staff participation in CSR initiatives leads to "higher employee engagement levels and more favorable views of senior management".

The argued that employees who rated their firm's CSR efforts as strong tended to have a more positive outlook of the future, greater job satisfaction and higher confidence in the company's future than those who regarded their employers' CSR efforts as weak.