Korn Ferry (KFY): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear, no-nonsense breakdown of the forces shaping Korn Ferry (KFY) right now. I see a firm navigating a complex global landscape where talent is the ultimate economic lever, but geopolitical and technological shifts create real friction. The key takeaway is this: KFY's ability to pivot its consulting services toward AI integration and ESG-mandated leadership will defintely determine its near-term growth trajectory, even as a strong US Dollar pressures its international revenue, which is over 40% of the total.

Political Factors: Geopolitics and Tax Impact

Geopolitical tension is a double-edged sword for Korn Ferry. While it complicates cross-border talent placement-especially with trade policy shifts like US-China protectionism creating regulatory hurdles-the same tension drives demand for high-value global leadership advisory. Clients need help navigating this mess. Also, keep an eye on government spending: increased budgets for infrastructure and defense can boost specialized public sector executive search demand.

Here's the quick math: Tax policy changes, particularly corporate tax rates, directly hit the bottom line. With an operating margin around 12.5% in FY2025, even a small tax increase can significantly erode profit. Geopolitics complicates everything, but it also creates high-value advisory work.

Action: Finance should draft a scenario analysis detailing the impact of a 2% corporate tax hike on FY2026 earnings per share (EPS) by month-end.

Economic Factors: Caution and Currency Headwinds

Global economic slowdown fears are making clients cautious. They aren't pulling the plug entirely, but they are deferring large-scale consulting projects, preferring shorter, high-impact engagements that show immediate return on investment (ROI). This means KFY must focus on quick wins, not multi-year transformation deals.

Sustained high inflation is a major cost driver. It increases wage pressure for the executives KFY places, making compensation advisory trickier, plus it raises the cost of retaining KFY's own top consultants. The strong US Dollar (USD) is a persistent headwind. Since international revenue is over 40% of the total, a strong USD negatively impacts revenue when translated back to US dollars. Short-term projects are in; long-term uncertainty is out.

Action: Sales teams must re-package 12-month consulting engagements into three, 90-day, high-impact modules to align with client capital expenditure (CapEx) caution.

Sociological Factors: The New Definition of Leadership

The shift to hybrid and remote work models fundamentally changes how organizations define and seek leadership. A leader's ability to manage a distributed team is now a core competency, not a bonus. This is a massive opportunity for KFY's assessment and development services. Growing focus on Environmental, Social, and Governance (ESG) mandates also drives demand for diverse and sustainability-focused board and executive placements.

The tight labor market for highly-skilled professionals increases demand for Korn Ferry's Recruitment Process Outsourcing (RPO) and Professional Search services-clients need help just filling seats. Generational shifts-specifically Gen Z entering management-require new approaches to compensation and career development advisory. Talent acquisition is now a core business strategy, not just HR.

Action: Consulting practice leaders should update all core leadership assessment profiles to include a measurable 'Distributed Team Leadership' competency by Q1 2026.

Technological Factors: AI as Threat and Opportunity

Rapid adoption of Artificial Intelligence (AI) and machine learning in talent acquisition is the biggest near-term threat and opportunity. It threatens traditional, manual executive search models, but it simultaneously creates a new, high-margin consulting service line helping clients implement and manage AI-driven HR. This is the pivot point.

Korn Ferry must defintely invest heavily in its digital platforms, like the Korn Ferry Intelligence Cloud, to stay competitive with pure-play HR tech firms. Increased client demand for data-driven talent analytics requires continuous upskilling of the firm's advisory staff. Cybersecurity risks for sensitive client and candidate data are escalating, requiring a significant portion of the technology budget. AI is the new talent battlefield.

Action: Technology leadership must allocate a minimum of 25% of the FY2026 CapEx budget specifically to AI integration and cybersecurity upgrades for the Intelligence Cloud platform.

Legal Factors: Compliance and Algorithmic Risk

Stricter global data privacy regulations, like the General Data Protection Regulation (GDPR) and new US state laws, increase compliance costs for handling international candidate data. Since KFY is a global firm, they must comply with the most stringent rules everywhere they operate. Evolving labor laws regarding contractor classification-the 'gig economy' rules-affect the firm's project-based consulting workforce structure.

Increased scrutiny on non-compete agreements and executive compensation packages requires precise legal advisory for clients, which is a service opportunity. The newest liability is litigation risk related to discrimination and bias in hiring algorithms. As KFY advises on AI tools, they take on a portion of that risk. Compliance is the new friction point in global talent movement.

Action: Legal and Compliance must complete a full audit of international data handling protocols against the five strictest global privacy laws by the end of Q4 2025.

Environmental Factors: Sustainability as a Talent Lever

Client pressure to demonstrate a low-carbon footprint directly influences Korn Ferry's travel policies and office space decisions for the global consulting team. They are a service business, so travel is their main environmental impact. Reducing this is a client-facing necessity. Korn Ferry's own commitment to sustainability is a key factor in attracting Millennial and Gen Z talent. If they don't walk the talk, recruiting top talent becomes harder.

While the firm's direct environmental impact is low compared to manufacturing, it must report on Scope 3 emissions (indirect emissions like business travel) to satisfy investors and clients. Climate change-related risks, like extreme weather, can disrupt client operations, creating sudden, short-term demand for organizational resilience consulting. Sustainability is now a talent magnet and a consulting opportunity.

Action: Operations should issue a mandate to reduce business travel-related Scope 3 emissions by 15% in FY2026, using virtual meeting platforms as the primary alternative.

Korn Ferry (KFY) - PESTLE Analysis: Political factors

Increased geopolitical tension drives demand for global leadership advisory, but complicates cross-border talent placement.

You and your peers are facing a new reality where geopolitics isn't just a headline; it's a core operational risk. The intensifying rivalry between major global powers, particularly the US and China, is forcing companies to fundamentally rethink their leadership structures and supply chains. This volatility is a double-edged sword for Korn Ferry: it boosts the need for our high-level strategic consulting and executive search for leaders who can navigate this complexity, but it makes the actual placement of cross-border talent much harder.

We see a clear uptick in demand for leaders with deep experience in risk mitigation and global compliance. Honestly, companies are trading efficiency for resilience right now. Korn Ferry's Executive Search segment saw a strong 14% year-over-year increase in fee revenue in Q4 FY2025, reaching $227.0 million, which suggests that the search for resilient, visionary leadership is a top priority, even as consulting revenue saw a decline.

The core challenge is workforce mobility:

• Stricter visa regimes, like the US tightening H-1B restrictions, limit the flow of high-skilled international talent into the US.
• China's introduction of the K visa in 2025, designed to attract international experts in AI and semiconductors, shows a direct political strategy to win the global talent war.
• Cross-border compliance risk is now a central factor in executive hiring, not a footnote.

Trade policy shifts and protectionism in key markets (e.g., US-China) create regulatory hurdles for international assignments.

The shift toward protectionism and targeted tariffs directly impacts our clients' global footprint, which then dictates their talent needs. When the US reimposed new, sector-specific tariffs on Chinese imports in Q1 2025, it accelerated the 'China-plus-one' strategy across the Asia-Pacific region. This means our clients are diversifying production and talent to lower-risk regions like Southeast Asia, Eastern Europe, and Mexico.

For Korn Ferry, this creates a surge in demand for executive talent in new, emerging hubs, but it also necessitates deeper, more complex due diligence on international assignments. We're not just finding a CEO; we're finding a CEO who can manage a fragmented supply chain and operate under a new, volatile tariff regime. The need for leaders in supply chain strategy and trade compliance is persistent.

Government spending on infrastructure and defense may boost demand for specialized public sector executive search.

The US federal budget for Fiscal Year 2025 (FY2025) is a clear signal of where specialized executive search demand will spike. The Department of Defense (DoD) budget request alone was approximately $849.8 billion, with a heavy focus on modernization and technology. This isn't just about buying hardware; it's about finding the leadership to manage those massive, complex programs. The money is flowing to specific, high-tech areas.

Here's the quick math on the opportunity: The DoD's request included $143.2 billion for Research, Development, Test, and Evaluation (RDT&E), with $1.8 billion specifically earmarked for Artificial Intelligence (AI). This translates directly into a high demand for executive talent in the Government Contracting (GovCon) sector-leaders in AI, cybersecurity, and advanced logistics. Korn Ferry's ability to place specialized public sector executives who hold the necessary security clearances and technical expertise becomes a significant growth opportunity, offsetting caution in other corporate sectors. The government is defintely hiring for the future.

Tax policy changes, particularly corporate tax rates, directly impact the firm's operating margin, which was around 12.5% in FY2025.

Any major shift in US corporate tax policy, such as a change in the statutory rate, immediately hits our bottom line. For FY2025, Korn Ferry's operating margin stood at approximately 12.5% (specifically 12.49% at year-end), based on a full-year fee revenue of $2,730.1 million. A one-point change in the corporate tax rate-say, from 21% to a higher rate-could reduce net income and impact capital allocation decisions, like the $89 million returned to shareholders through share repurchases in FY2025.

The current political environment is characterized by policy uncertainty, especially around the potential expiration or modification of provisions from the 2017 Tax Cuts and Jobs Act. This uncertainty forces the finance team to model multiple tax scenarios, which can slow down strategic decisions on acquisitions or major capital investments. We must constantly monitor legislative developments because tax policy is a direct, non-negotiable factor in maximizing shareholder returns.

Korn Ferry (KFY) - PESTLE Analysis: Economic factors

Global economic slowdown fears are causing clients to defer large-scale consulting projects, favoring shorter, high-impact engagements.

You are defintely seeing a client behavior shift as global economic uncertainty lingers, which directly impacts Korn Ferry's project pipeline. Clients are not cancelling work, but they are clearly delaying the start and slowing the delivery of large-scale, long-duration consulting engagements, a classic recession-prep move.

This caution is visible in the firm's fiscal year 2025 (FY'25) results. In the fourth quarter of FY'25, Consulting fee revenue saw a drop of 7% year-over-year. Management explicitly attributed this decline to a slower delivery of backlog engagements driven by clients, shifting the revenue conversion timeline. This forces the firm to focus on shorter, high-impact advisory work, which is a faster but less predictable revenue stream.

Sustained high inflation is increasing wage pressure for Korn Ferry's own consultants and for the executives they place.

The persistence of elevated inflation remains a headwind, creating a dual pressure point for Korn Ferry. First, it increases the cost of retaining your own top-tier consultants; second, it drives up the executive compensation packages you must broker for clients, making placements more costly.

The US annual inflation rate was holding at approximately 3% in September 2025, which is notably above the Federal Reserve's long-term target. This sustained high cost-of-living translates into higher salary expectations for the senior talent Korn Ferry places, particularly in high-demand areas like Digital and Executive Search. Here's the quick math on the pressure points:

• Executive Search fee revenue grew by 5.0% in fiscal 2025, largely due to a 3% increase in the weighted-average fee billed per engagement, indicating higher placement costs.
• The market for specialized skills, like those in AI and cybersecurity, continues to see competitive wage growth, forcing Korn Ferry to maintain high compensation to prevent internal talent churn.

Interest rate volatility makes capital expenditure decisions-like investing in new HR technology-more unpredictable for their client base.

The Federal Reserve's monetary policy adjustments create a volatile environment for capital expenditure (CapEx) decisions, especially for large, non-essential projects like investing in new human resources (HR) technology platforms. When the cost of borrowing money is unpredictable, clients defer long-term, multi-million-dollar tech rollouts.

As of October 2025, the Federal Reserve's target range for the federal funds rate was between 3.75% and 4.00%. This high-for-longer rate environment directly increases the cost of capital for Korn Ferry's clients, making them hesitant to greenlight major investments. To be fair, Korn Ferry is trying to counter this by investing in its own platforms, committing $62 million in FY'25 to technology platforms and product enhancements, aiming to offer subscription-based, less CapEx-heavy solutions to clients.

Strong US Dollar (USD) against other currencies negatively impacts revenue translation from non-US markets, despite international revenue being over 40% of the total.

A strong US Dollar is great for US purchasing power, but it's a direct headwind for a global firm like Korn Ferry. When you translate foreign earnings back into USD for reporting, a strong dollar makes that revenue look smaller-it's a currency translation loss.

International operations are a significant part of the business, representing over 40% of total fee revenue. This exposure means currency fluctuations materially affect reported results. For example, in the fourth quarter of FY'25, consolidated fee revenue grew by 3% at actual currency, but the underlying performance was stronger, growing at 4% at constant currency. That 1% difference, or more, is the foreign exchange impact.

The geographic segment performance in Q4 FY'25 clearly illustrates the importance of non-US markets, even with the currency drag:

The foreign exchange effect is a constant battle you have to factor into global business models.

Korn Ferry (KFY) - PESTLE Analysis: Social factors

The social landscape in 2025 is a powerful tailwind for Korn Ferry, but it's not without complexity. You're seeing a fundamental re-wiring of the employer-employee contract, which directly translates into higher demand for the firm's core services-especially in areas like leadership assessment, compensation advisory, and Recruitment Process Outsourcing (RPO). The key takeaway is that the shift to a purpose-driven, flexible, and multi-generational workforce is making talent acquisition and retention more specialized and, frankly, more expensive for companies, which benefits Korn Ferry's diversified model.

The shift to hybrid and remote work models fundamentally changes how organizations define and seek 'leadership' talent.

The hybrid work model has moved from a temporary fix to a permanent reality, but the execution is messy. Korn Ferry's own Workforce 2025 research shows a significant disconnect: while 69% of U.S. workers want to work remotely at least part-time, only about 32% currently have access to hybrid options. This gap forces companies to redefine what a successful leader looks like, prioritizing qualities like digital communication expertise, virtual team-building experience, and remote management skills over traditional in-office presence. This is a direct revenue driver for Korn Ferry's Executive Search and Consulting segments, as clients need help identifying and developing these new leadership competencies. The firm's Executive Search segment saw a strong increase, with Q4 FY25 fee revenue rising to $227.0 million, a 14.2% jump year-over-year, partly fueled by this demand for flexible, digitally-fluent leaders.

Growing focus on Environmental, Social, and Governance (ESG) mandates drives demand for diverse and sustainability-focused board and executive placements.

ESG is no longer a peripheral compliance issue; it's a central strategic mandate. Companies are under increasing pressure from investors, regulators, and employees to embed sustainability into their core business. This has created a surge in demand for executives who can balance profitability with ESG objectives, leading to the rise of roles like the Chief Sustainability Officer (CSO). For Korn Ferry, this means a higher volume of specialized, high-fee executive search engagements and advisory work in the Consulting segment, focusing on board diversity, compensation linked to ESG metrics, and succession planning for purpose-driven leadership. The firm is well-positioned, as these placements often require a global network and deep industry expertise to find the right, scarce talent.

A tight labor market for highly-skilled professionals increases demand for Korn Ferry's RPO (Recruitment Process Outsourcing) and Professional Search services.

The labor market for highly-skilled workers remains persistently tight, despite broader economic fluctuations. When companies can't find the talent they need quickly, they outsource the entire function or key roles. This dynamic directly benefits Korn Ferry's scalable solutions. For the full fiscal year 2025, the Professional Search & Interim segment generated fee revenue of $503.5 million. More specifically, the RPO segment, which handles large-scale, ongoing recruitment for clients, saw its fee revenue grow to $93.3 million in Q4 FY25, an increase of 4.3% year-over-year, driven by new client wins in North America and Asia Pacific. This is a defintely a high-volume, recurring revenue stream that acts as a hedge against volatility in the high-end Executive Search market.

Generational shifts (Gen Z entering management) require new approaches to compensation and career development advisory.

We now have five generations in the workplace, and their priorities are dramatically different. Korn Ferry's research highlights that 75% of Gen Z employees identify challenges working with other generations due to differing communication styles and values. This generational friction, plus the fact that 70% of workers are worried about the cost of living, means compensation and career development are critical pressure points. This drives demand for Korn Ferry's Consulting services, which advises clients on:

• Designing compensation plans that prioritize job security alongside pay.
• Creating flexible career paths and training programs that appeal to Gen Z's preference for continuous learning.
• Developing multi-generational leadership training to bridge communication gaps.

The entire workforce is demanding a new value proposition, and companies are paying for expert advice to get it right.

Here's the quick math on how these social trends are reflected in the segments most directly impacted by the shifting workforce:

Finance: Track RPO and Professional Search growth rates quarterly; they are the best leading indicators of sustained demand from the mid-market and highly-skilled labor shortage.

Korn Ferry (KFY) - PESTLE Analysis: Technological factors

Rapid adoption of Artificial Intelligence (AI) and machine learning in talent acquisition threatens traditional executive search models but creates a new consulting service line.

The rise of Artificial Intelligence (AI) and machine learning (ML) is an existential challenge to the traditional executive search model, which relies heavily on human networks and manual candidate mapping. The threat is real: 67% of talent professionals surveyed by Korn Ferry see AI playing a major role in talent strategies in 2025, which means automation is coming for the lower-value parts of the search process.

But this disruption is also a massive opportunity to pivot the business toward higher-margin consulting. Korn Ferry's strategy is to blend data-driven insights with personalized human strategies, essentially selling the interpretation of the data, not just the data itself. Still, the risks of using AI in talent acquisition are clear: 40% of talent specialists worry about compromising the human side of recruiting, and 25% are concerned about algorithmic bias, which could lead to legal or reputational damage for the firm and its clients.

Korn Ferry must defintely invest heavily in its digital platforms (e.g., Korn Ferry Intelligence Cloud) to stay competitive with pure-play HR tech firms.

To compete with agile HR technology (HR Tech) startups, Korn Ferry must continuously pour capital into its proprietary digital assets, particularly the Korn Ferry Intelligence Cloud. This platform is the core engine for moving the firm beyond a pure-play consulting model to a scalable, subscription-based service (Digital segment). For the full fiscal year 2025 (FY'25), the company allocated a substantial $62 million to technology platforms, tools, and product enhancements.

This investment is starting to pay off by stabilizing a key revenue stream. For instance, in Q1 FY'25, the Digital segment's fee revenue was $88 million, with subscription and license fee revenue growing 7% year-over-year to $34 million. This subscription-based revenue, which is more predictable than project-based consulting, accounted for approximately 39% of the Digital segment's total fee revenue in that quarter. That's a good anchor against market volatility.

Increased client demand for data-driven talent analytics requires continuous upskilling of the firm's advisory staff.

Client expectations have shifted from simple advice to data-backed, predictive analytics. With 26% of employers planning to increase their use of people analytics in 2025, Korn Ferry's advisory staff must evolve from traditional consultants to data-fluent strategists. This creates a mandate for continuous internal upskilling and a Learning & Development (L&D) 'wake-up call' for the firm.

The internal pressure is intense because employees see L&D as a retention tool; a Korn Ferry survey found that 67% of employees would stay with a company if offered upskilling opportunities, even if they disliked their job. Furthermore, 32% of companies are specifically planning to focus on upskilling to close skills gaps, a trend Korn Ferry must lead by example. The firm has noted that workers in North America and Europe are being outpaced in AI training by counterparts in regions like Brazil and India, indicating a critical need to accelerate AI-specific training for its core consulting markets.

Cybersecurity risks for sensitive client and candidate data are escalating, requiring a significant portion of the technology budget.

As a custodian of highly sensitive client and candidate data-including compensation, assessment results, and succession plans-Korn Ferry faces escalating cybersecurity risks. The firm's own filings recognize this as a material risk that could lead to improper disclosure and reputational harm. This is part of a wider industry trend where 63% of global leaders report their organization's risk exposure has jumped in the past year.

This heightened threat landscape, driven in part by AI-powered attacks, necessitates a significant portion of the $62 million annual technology investment to be ring-fenced for defense. The global market reflects this urgency, with cybersecurity spending projected to surge to $212 billion in 2025, an increase of 15% from the prior year. [cite: 13, 14 in previous search] The firm must prioritize investment in key security areas:

• Data security solutions, especially for cloud-native environments.
• Advanced threat detection and response platforms.
• Compliance with evolving global data protection laws like GDPR and CCPA.

Korn Ferry (KFY) - PESTLE Analysis: Legal factors

Stricter global data privacy regulations increase compliance costs

The patchwork of global and US state-level data privacy regulations is not just a compliance headache; it is a significant cost driver for a firm like Korn Ferry that handles vast amounts of sensitive international candidate data. You're now navigating a landscape where eight new US state privacy laws took effect in 2025 alone, including those in Delaware, New Jersey, and Maryland.

These new laws, which often mirror the European Union's General Data Protection Regulation (GDPR) in spirit, mandate stricter data minimization and require Data Protection Assessments (DPAs) for high-risk processing activities. For a talent acquisition firm, candidate screening and profiling often qualify as high-risk. Failure to comply carries steep financial penalties. For instance, in Maryland, businesses face fines up to $10,000 per violation, which can escalate to $25,000 for repeat offenses.

This means your investment in centralized compliance frameworks and automated Data Subject Access Request (DSAR) responses must rise. Honestly, you can't afford to treat privacy as a check-the-box exercise anymore; it's a core operational cost.

• Eight new US state privacy laws effective in 2025.
• Maryland penalties: up to $25,000 for repeat offenses.
• Compliance requires mandatory Data Protection Assessments.

Evolving labor laws affect the project-based consulting workforce

Korn Ferry's consulting and interim services rely heavily on a flexible workforce structure, but evolving labor laws are making the classification of independent contractors a major legal risk. The US Department of Labor (DOL) introduced a new rule in 2024 (effective in 2025) that shifts the standard for determining a worker's status under the Fair Labor Standards Act (FLSA), focusing on the 'economic realities' of the relationship.

This change, coupled with stringent state-level tests like the 'ABC test' in Massachusetts, increases the risk of misclassification claims. If a consultant is reclassified as an employee, Korn Ferry faces liability for back pay, overtime, and tax penalties. The ongoing legal debate, despite some favorable rulings for the gig economy, still necessitates continuous review and refinement of all independent contractor agreements to clearly define the work and maintain the contractor's independence.

Here's the quick math: misclassification of just a handful of high-billing consultants can quickly turn into a multi-million-dollar liability when you factor in back taxes, benefits, and legal fees. You defintely need a clear, defensible classification policy across all your US offices.

Increased scrutiny on non-compete agreements and executive compensation

The legal environment surrounding talent mobility and executive pay is tightening, which directly impacts the advisory services Korn Ferry provides to its clients. While the Federal Trade Commission's (FTC) proposed nationwide ban on non-compete agreements was blocked by a federal court, the regulatory focus has simply shifted to the states.

In 2025, states are actively legislating new restrictions. For example, Virginia expanded its non-compete ban for 'low-wage employees' to include all workers entitled to overtime compensation under the FLSA, regardless of their earnings. This trend forces clients to rely on non-solicitation and confidentiality clauses instead, requiring a new level of legal precision in contract drafting-a service KFY must be prepared to deliver.

Separately, executive compensation remains a hot-button issue. Boards face intense scrutiny from shareholders and regulators to link pay not just to financial performance, but also to Environmental, Social, and Governance (ESG) and other stakeholder metrics. This demands that KFY's executive search and advisory teams provide advice grounded in the latest SEC disclosure requirements and corporate governance standards to avoid legal challenges to pay packages.

Litigation risk from bias in hiring algorithms

The use of Automated Employment Decision Tools (AEDTs) in talent consulting is a growing liability. Korn Ferry, which offers digital talent solutions, is exposed to the rising litigation risk related to algorithmic bias and discrimination.

The legal framework is moving to hold employers-and by extension, their consultants and vendors-accountable for discriminatory outcomes, even if the bias is unintentional (disparate impact). A key example is the ongoing Mobley v. Workday Inc. case, which was allowed to proceed as a collective action in May 2025, with nearly 100 individuals opting in to the age discrimination lawsuit.

New regulations like the California Civil Rights Council's Employment Regulations Regarding Automated-Decision Systems, effective October 1, 2025, clarify that employers cannot deflect responsibility onto vendors. This means KFY must embed mandatory human review and routine, independent bias audits into its AI-driven hiring processes to mitigate legal and reputational risk. It's a clear mandate: human oversight must be the final checkpoint.

Korn Ferry (KFY) - PESTLE Analysis: Environmental factors

Client pressure to demonstrate a low-carbon footprint influences travel policies and office space decisions for the global consulting team.

The pressure from clients and investors to demonstrate a verifiable low-carbon footprint (decarbonization) is directly reshaping how Korn Ferry delivers services. Our 2025 Annual Report acknowledges that evolving customer expectations around corporate responsibility, including climate change, can limit the extent, frequency, and modality of consultant travel. This isn't just a compliance issue; it's a client-service mandate.

For a consulting firm, this means shifting from a default of air travel to a hybrid model, which impacts both cost structure and service delivery. It also drives real estate strategy. As of 2021, approximately 70% of Korn Ferry's total square feet were already in leased properties certified to green building standards like LEED and BREEAM, a number that has been increasing. This focus on green office space is a tangible way to meet client and employee expectations for a lower Scope 2 footprint (purchased electricity and heat).

Korn Ferry's own commitment to sustainability is a key factor in attracting Millennial and Gen Z talent, impacting recruiting success.

In the war for talent, especially for high-potential Millennial and Gen Z professionals, a genuine commitment to environmental sustainability is a non-negotiable part of the employee value proposition (EVP). By 2025, Generation Z is projected to make up a quarter of the global labor force, so their values matter. Honestly, if you don't have a clear environmental stance, you're defintely going to lose out on top candidates.

Korn Ferry's own research shows that almost half of Gen Z workers have put pressure on their employer to take action against climate change. Furthermore, 70% of Millennials agree that a company's promoted values are extremely important to them. This generational preference forces the firm to not only set targets but also communicate them clearly to ensure recruiting success. The firm has a clear, publicly stated 2025 target to reduce total Scope 1 and Scope 2 GHG emissions for its global offices by 30% compared to the 2019 baseline.

The firm's environmental impact is relatively low compared to manufacturing, but it must report on Scope 3 emissions (e.g., business travel).

As a professional services firm, Korn Ferry's direct operational footprint (Scope 1 and 2) is small, but its indirect value chain emissions (Scope 3) are the real story. In 2023, the firm's total carbon footprint was 48,314 metric tons of CO₂ equivalent (tCO₂e), and Scope 3 emissions accounted for a massive 89% of that total. You can't ignore that. While the firm's operational emissions (Scope 1 and 2) decreased by 20.59% in 2023 compared to 2022, the Scope 3 number is the one that needs management attention.

The largest Scope 3 category is Purchased Goods and Services, but business travel is the most visible and controllable for a consulting team. Business travel alone contributed 9,255 tCO₂e in 2023, representing 21.56% of the total Scope 3 emissions. This is why client pressure and internal policy around virtual meetings and travel are so crucial-they directly attack the second-largest piece of the firm's carbon pie.

Here's the quick math on Korn Ferry's 2023 carbon footprint composition:

Climate change-related risks (e.g., extreme weather) can disrupt client operations, creating sudden, short-term demand for organizational resilience consulting.

Climate change is no longer a long-term risk; it is a near-term operational disruptor. Extreme weather events-like the wildfires, hurricanes, and floods we see more of-directly impact client supply chains, facilities, and workforces. When a major disruption hits, it creates a sudden, short-term demand spike for organizational resilience consulting.

Korn Ferry's own 2025 CEO & Board Survey found that a startling 63% of global CEOs and board directors said their organization's risk exposure has jumped in the past 12 months. This is a clear signal of the market's heightened anxiety. The firm is capitalizing on this by offering services that help clients build resilience, focusing on the people-side of climate risk:

• Developing leadership capable of navigating climate-related crises.
• Redesigning organizational structures for supply chain and workforce flexibility.
• Embedding climate risk into governance and culture.

This risk-to-opportunity pivot is a key growth area. The firm's expertise in talent and organizational strategy is perfectly positioned to address the human and structural elements of climate adaptation, which is a much stickier, higher-value consulting engagement than just providing a risk report.