Amazing Things Can Happen When Organizations Are Led by Sustainably Minded Thinkers

Sustainable LeadershipEnvironmental, Social, and GovernanceSustainability
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Constantine Alexandrakis
10月 26, 2021
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Sustainable LeadershipEnvironmental, Social, and GovernanceSustainability
Executive Summary
Corporations simply will not have access to capital, talent, or reputational trust unless effective sustainability agendas and priorities are clearly evident.
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A seismic shift has occurred. Sustainability has become a true societal and business imperative, and it has never been more important for boards and leaders to approach every decision with a sustainable mindset.

In today’s world, profit is becoming impossible without sustainable business practices. Gone are the days of winning business because of beating competitors on cost. It is becoming table stakes to show how and where sustainability is at the core of the approach, or risk being dismissed altogether. Corporations simply will not have access to capital, talent, or reputational trust unless effective sustainability agendas and priorities are clearly evident.

We have surveyed thousands of global corporate directors, C-suite executives, board-level talent, and recruiting teams over the course of the past 18+ months, and what has emerged is an awareness of just how much companies understand the need to focus on sustainability, yet those we depend on most to drive this change and champion this cause – boards and CEOs – struggle to take the first step toward engaging and are starkly behind. Our research found that one-third of C-suite leaders cite organizational complexity and bureaucracy as the primary obstacle to embedding sustainability into their overall business strategy.

So how do we course correct and get on the right path in a swift and sound manner?

Put the board in the driver’s seat guided by a lens of sustainability.

The sustainability agenda starts and ends with the board. Every single member of the board should be viewing the company and its operations with sustainability at the core. Structure the board to engage meaningfully, bringing the same focus to the issue as they do on other critical operational and business areas, like governance and compensation. This will create connective tissue, tying sustainability into other board discussions. Our research points to progress in this area: sustainability is now seen as a critical leadership competency for directors (63 percent) and senior executives (77 percent).

Furthermore, rethink the company strategy to ensure that sustainability is a thread woven throughout, rather than an afterthought, or worse yet, a strategy all on its own. This signals that the board is not just supportive of corporate sustainability efforts but is an active partner in orienting the company around sustainability. Key components of the strategy should be blatantly linked to sustainability, including compensation, recruitment, training and development and performance management – and make these links public for all to see.

Work collaboratively while harnessing a challenger mindset.

While the board’s buy-in and deployment of a sustainable strategy throughout the business is vital, they cannot operate in a vacuum. A collaborative partnership between the board leaders and the CEO and other senior executives is essential. Directors must embed sustainability into all interactions with the CEO and executive team to ensure that the topic is constantly top-of-mind. This fosters a dynamic where executives continually think of sustainability as part of their overall remit, even when not explicitly tasked with it. These are complex issues and integration and alignment over the long term is the pathway to productive and meaningful results.

Embrace different viewpoints and experiences to truly unlock powerful changes. Boards are far more effective in a challenger role versus that of a gatekeeper role. When a board simply rallies around the mindset of the C-suite instead of bringing new ideas and posing questions – which often infuses positive contrarianism – progress becomes paralyzed.

Do not believe the hype – adding a sustainability expert is not a silver bullet.

One of the biggest myths I hear in discussions around sustainability strategies is that by hiring an expert in sustainability the organization will solve the equation. The reality is more complex. Boards must be filled with sustainability-minded directors. The C-suite needs leaders with sustainability competencies across all aspects of the business. 

If sustainability is viewed as a mindset versus expertise, the result is an organization that is guided by sustainable values and beliefs. The same is true when recruiting for CEOs. When CEOs have bought into the sustainability strategy, stakeholders see that a company’s commitment starts at the top. Without that alignment, sustainability is likely to be forgotten from the overall business strategy and other corporate activities.

Positive momentum is starting to build in shifting this mindset; a recent analysis we conducted of job specifications showed that 41 percent of the searches our RRA consultants conducted in 2021 referenced sustainability, which is up from just 15 percent in 2019 and 9 percent in 2015.

Go all in.

This is arguably the most important tenet overall. We have found overwhelmingly that when boards do decide to increase their focus on sustainability, they struggle with where to start and how much effort to put behind actions. Do not hesitate; do not put this off another year – the time is now. Going all-in and taking swift action will reap dividends and the payoff will materialize quickly. Fast track companies quickly outpace those taking a systematic, phased-in approach. Maturity can be reached in about half the time, while others move slowly or stall out altogether. Our recent Divides and Dividends report keyed in on this topic, revealing that more than one-third of C-suite leaders say that slow-changing company culture is becoming a real impediment for business.  

Set clear goals and metrics for tracking progress toward sustainability measures and share traction with stakeholders. Around every corner, I see an insatiable hunger for tomorrow’s leaders to be creative change agents and to construct a new vision for the future. We must empower our leaders to rise to the challenge to deliver meaningful change with a sustainable mindset. There is simply too much to lose.