Sustainability knowledge and expertise is increasingly important for top management positions

Sustainable LeadershipSustainability
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Claus Fischer
12月 19, 2021
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Sustainable LeadershipSustainability
Executive Summary
Know-how and expertise in sustainability are among the most frequently demanded qualifications for top management positions.
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Sustainability has a growing influence on the business development of companies. Experience in the field of sustainability is therefore increasingly important for top management roles.

The term "sustainability" has trended for quite some time now. When it comes to filling management positions in the retail sector, knowledge and experience in sustainability are among the most frequently demanded qualifications for top management positions. 

Sustainability is often mentioned alongside buzzwords such as strategic realignment, change management or transformation. It is no coincidence that the aphorism "sustainability is the new digital" has been around for some time. After all, sustainability has become a key factor for innovative strength, growth and securing the future.

Sustainability’s influence on purchase decisions is growing

If your strategic business development loses sight of consumer interests and investors, sooner or later the entire business model will be at stake. With a view to consumer interests, it is apparent that sustainability is increasingly a major factor in purchasing decisions. Consumers look for products with sustainability credentials and are willing to pay more for brands that invest in environmental or social initiatives that align with their beliefs. 

A recent study by OC&C Strategy Consultants revealed German consumers who buy from brands that organize their processes sustainably and develop an according product portfolio, account for retail spending of 240 billion euros – around 40 percent of the total retail spend in Germany.

Sustainability as a strategic element for the entire organization

It is no wonder, therefore, that many companies are working diligently on sustainability strategies. The motives are diverse and range from self-initiated to regulatory constraints and the consumer pressure described above. This development has shifted preferred management qualifications and has given rise to new job profiles.

Like digitization, sustainability has gradually developed into a strategic element that will permeate and influence all areas of the business in the long term. Certain industries and companies are at different stages of this journey. Some have sustainability managers operating as lone wolves or with small units, while other companies are already ensuring that sustainability-related initiatives are imbedded throughout the entire organization – from production and logistics to marketing and accounting.

At Ikea sustainability is a C-level matter`

For some sustainability is now a top priority. At Ikea, for example, Dennis Balslev, CEO for the German market, has also taken on the role of Chief Sustainability Officer. At the time of this move in 2019 it sent a strong signal to the industry that sustainability was rapidly increasing in importance in the retail sector, and that it should sit at management level in the corporate hierarchy. The furniture giant has thus made the ambitious goal of becoming people and planet positive by 2030 a key management task.

Change can also be observed at traditional companies in other sectors. For example, in the construction industry, which is responsible for 38 percent of CO2 emissions in Germany. One big player that has already recognized its responsibility is the Dax company Heidelberg Cement. Group CEO Dominik von Achten recently explained in an interview with Süddeutsche Zeitung that his company could significantly contribute to the decarbonization of the sector and wants to make the 150-year-old company greener from the ground up. 

CSO Nicola Kimm, who previously held similar positions in various companies in Europe, Asia, and the USA, has also been responsible for Heidelberg Cement's sustainability agenda since September. Kimm not only took over operational responsibility for a production network in Asia for BASF but was also able to successfully implement various decarbonization initiatives during her time at Signify (formerly known as Philips Lighting). 

These two examples highlight a new generation has arrived in the executive suites of large companies who consider sustainability to be critical to business success.

Sustainability as a transformation and leadership issue 

Following our global study Leadership Actions for a Sustainable Future and within our capacity as consultants, we have found that targeted sustainability measures are in the interests of share- and stakeholders. Integrating sustainability into the business model as a strategic issue requires scouting networks, establishing contacts, and shaping change from the top of the organization – because change is always a question of leadership.