Modern global crises—including climate change, the COVID-19 pandemic and a spotlight on social injustices—have brought significant changes to the business landscape. The key takeaway? Things need to change right now if we’re to enjoy a sustainable future—and, more clearly than ever, that change needs to come from the top.
Sustainable business extends beyond environmental efforts, to encompass all aspects of the United Nations’ Sustainable Development Goals, including diversity, equity and health. Thankfully, sustainability has become a critical factor in corporate investment. As many as 75% of investment leaders expect environmental, social, and governance (ESG) factors to become more influential as calls for change grow louder.
If your company isn’t taking steps to create impactful change, it needs to start now, with sustainable initiatives that have leadership buy-in and company-wide support.
What’s happening right now?
Right now, sustainability is largely synonymous with environmental efforts—namely, energy waste reduction. There’s a trend of businesses setting science-based carbon targets and making pledges to reach net-zero emissions by a future date. But is all this forecasting virtue signaling, or are companies on track to implement changes slowing the ever-rapid progression of climate change?
CIOs and CTOs from several Fortune 500s claim to be critical in transforming their company’s energy use efforts. However, only half are part of their organization’s sustainability leadership team. It’s clear there’s strong sentiment surrounding sustainability initiatives; however, there appears to be a disconnect between these public-facing programs and leadership buy-in.
The risks of not taking action
Part of the reason so many corporations are quick to roll out sustainability programs is fear of what may follow if they don’t. Market share, talent, and brand identity are all at stake for organizations that lack a stated and credible commitment to sustainability. Against these risks, company leaders have a unique opportunity to pivot their businesses to a more sustainable future.
On the flip side, there’s a lot to be gained by thinking (and acting) sustainably. Recent research has found that taking societal impact into account when setting business strategy spurs innovation and helps companies identify new products, services, and business models. Additionally, sustainability is becoming increasingly influential in corporate investment, with 75% of investment leaders expecting ESG factors to become more significant.
A recent industry survey of C-suite executives, next-generation leaders, and employees across 11 countries to understand the state of sustainability within organizations. While 49% of U.S. C-suite respondents reported having a sustainability strategy, the research indicates that many leaders lack the capabilities to build a sustainability culture and galvanize their organizations behind the shift. It begs a simple question.
Where are all the sustainable leaders?
The first and most important qualification a corporate leader must possess is a deep understanding of sustainability issues. They should be able to recognize how their business operations and strategies can impact the environment and society. Unfortunately, corporate leaders who will guide their company to make profound, sustainable changes are increasingly in short supply. It’s getting more and more difficult to narrow down candidates with the necessary qualifications, skills, and mindset to navigate the complexities of sustainability.
The optimal combination of unique soft and hard skills may be a challenge to find in one person, which is why the executive level can spearhead change initiatives as a team. When looking at a company’s C-suite, gauge their potential effectiveness in fostering real change at the company level by asking these questions:
- Are your sustainability goals specific, measurable and aligned with organization’s strategy?
- Can you communicate the importance of sustainability to stakeholders, including employees, customers, investors and the wider community?
- Have you analyzed and interpreted data related to sustainability performance, and did you identify trends, patterns and insights that can inform decision-making?
- Will you think creatively regarding sustainability, to find new and innovative ways to reduce the company’s carbon footprint and address sustainability challenges?
- Can you collaborate and build partnerships with stakeholders, suppliers, customers, investors and community organizations, to achieve sustainability goals?
- Are you committed to ongoing learning and professional development, willing to adapt your thinking and approach as new sustainability challenges arise?
- Do you have strong leadership skills, including the ability to motivate and inspire teams, manage resources, and create a culture of sustainability within the organization?
Three actions CEOs need to take right now
The indisputable fact of the matter is that the time for change is right now. Organizations can’t kick the can down the road or wait for the ideal leader to step in and chart a course to change. To create a better future and a brighter tomorrow, CEOs need to act with purpose today.
1. Assemble a leadership team with sustainability in mind.
A CEO’s choice of who sits on their leadership team is critical to their organization’s progress on sustainability. They should look for people with the skills to lead a sustainable business—including a deeply rooted belief that business is not a commercial activity divorced from the broader societal and environmental context in which it operates.
2. Define clear sustainability goals and strategies.
Sustainability is a complex space that covers an array of environmental, economic, and social issues and a large web of stakeholders. CEOs need to translate sustainability goals into concrete actions and measurable objectives that leaders and employees can feel in their day-to-day work.
3. Communicate and build employee engagement.
Sustainability goals are easier to achieve when the workforce is engaged. CEOs should treat employee engagement as a strategic imperative beyond typical engagement surveys. This means setting sustainability goals and objectives, and generating buy-in that spans all levels of the organization.
Where do we go from here?
Organizations must elevate sustainability to an executive responsibility. CEO and board leaders need to make sustainability a fundamental strand of business strategy and spearhead radical, enterprise-wide transformation.
Companies that see sustainability as a core growth driver rather than a threat will go much faster (and further) in the years ahead. Behind this stewardship, companies who aren’t as quick to adapt will need to do whatever they can before it’s too late.