The Undeniable Case for Sustainable Leadership

No other time in recent memory has seen such a convergence of issues affecting people, planet and profit, where divides and inequalities threaten global structures, stability and health. In no uncertain terms, the recently published?Intergovernmental Panel on Climate Change report?detailed “unequivocal” evidence of the devastating impacts of global warming and issued a dire summation: “Bottom line is that we have zero years left to?avoid?dangerous climate change, because it's here,” Michael E. Mann, a lead author of the IPCC's 2001 report, told CNN.

News headlines sought to shake us out of our collective inertia:

“A Hotter Future Is Certain, Climate Panel Warns. But How Hot Is Up to Us” (The New York Times)

“It’s Now or Never” (The Guardian)

“Latest IPCC Report Predicts Disaster—Yet Again. But Not Much Will Happen—Yet Again” (Forbes)

The climate crisis is just one of many sustainability challenges that leaders must face. The global pandemic has magnified health and economic disparities. Social and racial injustices are in sharp focus. As our societies become more divided than ever before, leaders must step up and become part of the solution. What more needs to happen before effective action is taken? I, for one, will not wait to find out.

To gain a greater understanding of these unprecedented times and the progress business leaders have made towards solving the world’s most-pressing sustainability challenges, Russell Reynolds Associates commissioned global research unprecedented in its scope and scale. Fielded across 11 countries and surveying C-suite executives, next-generation leaders and employees, Divides and Dividends: Leadership Actions for a More Sustainable Future, provides data-driven insights and critical actions to help business leaders accelerate sustainability action.

The report, published today, reveals five key themes:

1. Macro, Micro and “Me” Priorities C-suite executives and employees agree on the big issues that most affect the future of society: climate change, pollution and global pandemics. But employees also want to see action on the micro, work-level challenges that affect them.

2. Brand-Centered Motivation versus Value Creation Organizations’ sustainability actions are largely initiated by brand management or risk mitigation concerns—putting them in danger of only engaging with sustainability at a surface level. Those that see sustainability as a critical lever for value creation are set to make the biggest strides forward in the next five years.

3. The Say/Do Divide On environmental issues, especially progress on climate change, there is a disparity between the priority C-suite respondents claim they are doing and what employees are seeing them do. At best, organizations have a perception gap that needs managing. At worst, they are falling short of the bar that employees consider real action.

4. Next Generation Leaders at the Vanguard Next-generation leaders are the most engaged drivers of sustainability action. They are in the trenches, overcoming barriers and yielding results. Organizations looking to accelerate their sustainability agenda should find ways to further empower and reward their future executives.

5. Leadership and Culture Slow-changing company culture and organizational complexity top the list of the greatest barriers to embedding sustainability into business strategy. To overcome these obstacles, leaders must use soft skills, such as authenticity, humility and self-awareness, to inspire change and galvanize action. Tellingly, few employees and C-suite leaders think their leadership teams display these attributes.

Today’s leaders can no longer take a wait-and-see position to make the business case for embedding sustainability or get away with bolt-on strategies. Increasingly investors and consumers are demanding more before opening their proverbial wallets.

Leaders who understand that stakeholders—employees, customers, shareholders, regulators and communities at large—increasingly expect them to make sustainability core to business strategy will be better positioned and more competitive. Shareholders are making sustainability a criteria for investment; consumers want to buy sustainable products and services; top talent want to work for companies that have a clear purpose and address inequities; and regulators will increasingly reward sustainable business practices.

Businesses thrive when society thrives. This means leaders must balance a long-term world view with immediate business demands. As evidenced in our research, addressing our most pressing societal and organizational issues requires a complete rethink of organizational strategy, operations and talent management: re-evaluating leadership mindsets and capabilities; making a frank assessment of culture; listening to employees and treating employee engagement as a strategic imperative; and developing and empowering next-generation leaders. In this report, leaders will find insights on what is and is not working and how to take necessary action – whether it be to start or accelerate.

Along with these unprecedented times is an unprecedented opportunity for leaders to affect meaningful change. Advancing sustainably for people and planet does not have to be at the expense of profit. On the contrary, as Divides and Dividends demonstrates, a triple bottom line payoff is not just a possibility, it is a reality for organizations with vision, conviction and determination to change the world for the better—and disprove those apocalyptic headlines.