Business is suffering from a rhetoric gap when it comes to sustainability.
When polled, 92 per cent of CEOs say that sustainability is a critical foundation for business success. Yet only 48 per cent said they are actively integrating it into their operations - and just 21 per cent believed that their organisation is playing a critical role in reaching sustainable development goals.
If sustainability is considered to be such an essential strand of a firm’s strategy, why are so many companies failing to walk their own talk? A new report indicates that it’s down the way they’re hired.
Russell Reynolds Associates analysed 4,000 executive and non-executive board level role specifications listed in 2019 - 15 per cent made direct reference to sustainability, but just four per cent mandated it as a requirement.
The second part of the study went a little deeper. Researchers wanted to identify whether leaders with sustainability track records possessed specific traits or qualities that have enabled them to make “progress where others have not” in order to help firms identify the traits to look for in future leaders.
In-depth interviews were conducted with 55 CEOs and board members with a notable track record of focusing on and making progress towards sustainability goals in tandem with commercial results. Their career histories were then compared to a control group from 50 Fortune Global 500 organisations with a poor sustainability record.
On average “sustainability pioneers” were three times more likely than the control group to have worked across multiple continents, more likely to have attained significant experience in two or more functions and were also more likely to have experience in operations or supply chain roles.
While this doesn’t infer causality, the report notes that leaders may “have benefited from their exposure to multiple cultures and a more well-rounded understanding of how business works".
“We are talking about and aiming for greatness over long periods of time,” says David Ricks, Chair and CEO, Eli Lilly and Company, one of the leaders highlighted in the report. “This requires a completely different mindset in leaders: people who are capable of breaking down what works and improving on it further so that we can consistently and efficiently deliver on our commitment to making peoples’ lives better through innovative medicines.”
The report also identified that sustainable leaders generally combined their sustainable mindset with four critical capabilities, which meant they were more likely to drive change then others. These were:
-- Multi-level systems thinking. They incorporate the interplay of business, societal and environmental systems and drive decisions that turn sustainability into a competitive advantage.
-- Stakeholder influence. They do not seek to manage stakeholders, rather they actively include them in defining and actioning decisions.
-- Disruptive innovation. They possess the courage to challenge traditional approaches and cut through bureaucracy to drive the disruptive innovation needed to do away with the profitability-sustainability trade-off.
-- Long-term activation. They do not simply have an orientation towards the long term, they set bold sustainability goals and rigorously drive concerted action in their pursuit.
“Transforming our world is all about leadership,” says Lise Kingo, CEO and executive director of the UN Global Compact.
“Enlightened CEOs and board members know that to succeed you need to be sustainable. This is the moment for top management and boards to ensure that these critical competencies are represented and developed across the organisation,” Kingo adds.
Access the full report here.
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