Why all leaders should be sustainability leaders
Over the past several years, business leaders have begun to recognise the importance of including environmental, social, and governance (ESG) in their business’ agenda. In 2022, 96% of the top 250 companies globally were reporting on their sustainability performance and outcomes and two-thirds of all organisations are specifically focusing on sustainability. Aside from the moral arguments associated with the increasing effects of climate change and ongoing human rights issues, the business case for sustainability has become increasingly clear to leaders. Research shows that businesses with higher ESG ratings see increased opportunities and greater financial gains over time. This focus on sustainability is also a proactive move by many businesses to future-proof themselves or their industry in general. According to the Value Reporting Foundation, 68 out of 77 industries will likely be affected by climate risk in a significant way. The earlier companies address this risk the less likely they are to be severely affected by it.
Successfully considering and implementing sustainability within a business necessitates a particular style of leadership. Although generic ‘good’ leadership traits are crucial in this journey, businesses also benefit from leaders possessing other, more tailored capabilities. However, many of these characteristics benefit businesses and leaders themselves in a number of ways beyond sustainability. These include:
Understanding of the wider context: No business operates within a vacuum, and it is important that leaders recognise and understand the greater context within which they are operating. This involves an awareness of how various global factors are interconnected and influence one another, the capacity to apply a systems thinking approach, and an understanding of current social norms and their potential to evolve. This allows leaders to be highly adaptive, cultivate a resilient business plan and strategy and respond effectively to challenges which arise – regardless of whether they are related to sustainability or not.
Vision: Sustainability leaders need to be able to think long-term and look beyond the immediate concerns and challenges facing their business. They need to be able to envisage another more prosperous and profitable world that considers the environment and societies. Beyond this, sustainability leaders must be able to communicate their vision en mass to gain buy-in from individuals within their company and beyond. This is integral to inspire action and deliver this vision. The general benefits of visionary leadership include higher levels of innovation, greater social impact, higher levels of trust and greater organisational leadership.
Courage: Sustainability is an extraordinarily complex topic with no right or wrong answers. Most decisions made by leaders are not black and white and initiatives that will yield long-term benefits often face resistance due to the short-term compromises that must be made. As such, sustainability leaders must trust in their decision-making and drive ahead with their idea, regardless of criticism and difficulties. In any aspect of business, leaders may not have all the answers, but they must be able to set a path for their organisation, defend this path and be open to making a few mistakes along the way.
Ability to be inclusive: Problems as multifaceted and complex as those relating to corporate ESG require collaboration and open dialogue to facilitate innovative solutions. According to the Centre for Excellence in Leadership (2007), sustainability leaders focus on building a “climate of support and accountability, rather than control”. By other internal members of the business, building cross-sector or in-sector partnerships and ensuring a wide range of voices and opinions are heard, complicated problems can be solved more holistically, challenges can be foreseen, and leaders can foster a collaborative and innovative organisational culture of innovation.
Leaders face a whole host of challenges in their day-to-day and although sustainability issues are going to be the most critical and important challenges they will face, the skills required to address any one problem will only better support leaders in solving other issues. The characteristics of a sustainability leader as shown above are not inherent traits – these are learned behaviours. Investing in your leaders or in yourself as a leader to adopt, nurture and develop these leadership characteristics will not only support a business on its sustainability journey, present or future, but will also better equip leaders for the spectrum of challenges their organisation may face.
The business case for sustainability has been made clear by numerous pieces of research (e.g. HBR, 2016; Visser, 2023). The business case for sustainable leadership is much the same. Sustainable leadership attracts talent, builds resilience and adaptability to changing situations and generates a competitive advantage. The skills required can be learned and distilled throughout an organisation via its company culture. Sustainability leadership should no longer be the exception but the rule – and this is absolutely achievable.
