Four Steps to Attract, Recruit and Retain a Bench of Sustainable Leaders

Sustainability has emerged as the pre-eminent lever for business growth and value creation. We recently interviewed 55 CEOs and board leaders who have already made sustainability a strategic priority. They were emphatic about the business benefits this has brought them. As Mads Nipper, CEO of Grundfos, told us: “I am 100 percent convinced that the companies that don’t take a full stakeholder approach—creating value for all stakeholders, not just shareholders—won’t be competitive and won’t exist.”

There is now a clear body of evidence that shows firms that put sustainability front and center are not only more innovative, but more profitable too. The Boston Consulting Group, for example, found that taking societal impact into account when setting strategy spurs innovation and helps companies identify new products, services and business models. Meanwhile, McKinsey Global Institute found that firms with a long-term perspective—critical to the achievement of sustainable business strategies—outperformed their peers on revenue growth, profit growth, total return to shareholders and job creation.

These are compelling facts for any business leader. But they take on even greater resonance as we all look to rebuild our organizations, economies and societies in the wake of Covid-19.

Grasping the sustainability agenda is more than a matter of strategy, policy and process—it is fundamentally about people and leadership. CEOs and boards must ensure sustainability is a core business priority, that stakeholders are considered alongside stockholders and that purpose is part of the corporate language.

Put another way, sustainable business cannot happen without sustainable leaders. Businesses must now focus on finding leaders who are not only willing to make the long-term sustainability of our world a top priority, but who are able to make the right strategic choices to drive real change on the ground.

Unfortunately, our research shows we still have a long way to go: In only 4 percent of non-executive and senior executive appointments is sustainability experience or mindset a requirement. This will need to radically change if we are to have any hope of making progress toward the 17 Sustainable Development Goals that the United Nations set out 10 years ago with the goal of building a more equal and sustainable future for all.

The good news is that we know change is possible—and that with the right approach things can change quickly. We have already seen organizations shift their leadership profiles in response to other market dynamics. Over recent years, you would be hard-pressed to find an executive search that did not include a conversation about a candidate’s digital acumen. D&I is now a de facto requirement in nearly half of all searches we carry out.

There is no reason why companies cannot make similar strides when it comes to sustainability. In fact, we know that the best organizations already hardwire sustainability into their frameworks and processes for how leaders are selected, promoted, rewarded and developed.

To set up your company for success, it is important that you now do the same. Here are four key areas to consider: 

1. Selection: When selecting senior leaders, make sure you look at candidates’ sustainable leadership potential and track record as key criteria. In my previous article on sustainability in business, I set out how we have worked with the United Nations Global Compact to create a blueprint for sustainable leadership, revealing the four differentiating characteristics that leaders need to effect real change. I urge you to consider incorporating these traits into your own selection processes.
2. Succession: Your succession processes signal to current and future leaders how they can succeed at your organization. Make sure you embed conversations about sustainability into these frameworks. At the same time, sustainability should also influence who is on the path to senior leadership roles and who is not.
3. Reward: It is important to integrate sustainability into the objectives, incentives and remuneration of board members, CEOs and executives. Remember, sustainable companies outperform their competitors on numerous financial metrics—this can create a self-sustaining pot for rewarding executives who embrace sustainability and incorporate it into their day-to-day activities.
4. Develop: Finally, make sure your leadership development processes and executives’ crucible experiences actively support leaders to develop and fine-tune a sustainable mindset and sustainable leadership attributes.

We are now at a critical crossroads where the dynamics of business and leadership must rapidly change. As one CEO, Manon van Beek of TenneT, told us during our research project with the UNGC, “With my CEO role comes responsibility to do the right thing.” And as our research shows, there are four concrete steps companies can take to do just that.

What have you seen your company do to help embed sustainable leadership traits into your organization?