What is a sustainable company?
Corporate sustainability is defined as an organization meeting the needs of its direct and indirect stakeholders without compromising the needs of future stakeholders.
In this context, stakeholders are groups or individuals who gain from or are damaged by, organizational actions and whose rights are respected, or violated, by such actions. Stakeholders can include employees, consumers, suppliers, pressure groups, communities, shareholders, and even future generations.
The following eight leadership behaviors are needed for leaders to implement corporate sustainability and, thereby, create and maintain a sustainable organization:
Promoting the company's vision
- Crafting a LT strategy that focuses on serving the triple bottom line
- Developing policies to meet those goals
Operationalizing Corporate Social Responsibility
- Turning policies into actions by integrating them into everyday processes and procedures
Obtaining top management support
- Getting buy-in for actions that create visibility for and awarness of global responsibility, both inside and outside the company
Engaging diverse stakeholders
- Aligning cultures and systems to create balanced relationships characterized by reciprocal commitments, responsibilities and benefits
Empowering and developing stakeholders
- Enhancing the power of individuals to implement CSR
- Being open to new ideas
- Providing training activities
- Challenging assignements
- Acting as a coach and mentor
Communicating with stakeholders
- Actively supporting and developing a culture of shared information among stakeholders about corporate sustainability
Measuring performance
- Holding individuals and groups accountable for their work through feedback, formal appraisal and reward policies
- Helping to ensure accountability among external stakeholders through regular reporting and external audits
Setting ethical standards
- Setting an example to stakeholders within and outside the organization, by behaving with integrity in both professional and personal life
[*] D’Amato, A. and Roome, N. (2009). “Toward an Integrated Model of Leadership for Corporate Responsibility and Sustainable Development: A Process Model of Corporate Responsibility beyond Management Innovation.” Corporate Governance: International Journal of Business and Society, 9, 421–434.
Who is a sustainable leader?
Sustainable leaders look beyond immediate, short-term gains to see the role their organization plays in a larger context. They set strategies and ensure the delivery of results that meet the triple bottom line of social, environmental, and financial performance. This means fostering long-term relationships with multiple internal and external stakeholders in order to show concern for their interests, encourage their engagement, and create value for them, motivated by the goal of corporate sustainability.
Conventional Leader qualities/competences
- Competitive
- Independant
- Habitual
- Likes to know the answer
- Shares its vision of future
- Driven by ego and self-esteem
- Protects self by delivering results
- Emotionally intelligent
- Thinks in terms of system
- Authentic to its personality
Sustainable Leader qualities/competences
- Collaborative
- Interdependent
- Agile
- Knows there is no one right answer
- Enables others to co-create the future
- Driven by purpose
- Gives self to serving others
- Emotionally and morally intelligent
- Thinks in terms of patterns emerging from mutiple systems colliding
- Authentic to its values
What new competences to build?
Based on a study from Russell Reynolds Associates and VU University of Amsterdam, the competencies distinctive to sustainable leaders fall into three overarching categories that represent the key aspects of sustainable leadership:
Sustainability mindset is reflected by a strong interior sense of purpose that grows into a stronger sense of purpose and mission within the organization. Sustainable leaders are oriented toward the long term. They feel an inherent motivation to meet the triple bottom line of social, environmental, and financial performance or “people, planet, and profit.”High emotional intelligence fosters resiliency, commitment, trust, and reciprocity with co-workers and external stakeholders, all of which are essential to enable business, social and transformational change. It improves teamwork, collaboration, innovation, and creativity. An empathic and compassionate mindset can generate product and service innovation aligned with core human values that are relevant to customers’ genuine needs and interests. Alignment of deep personal passion with society’s and the planet’s greatest needs can create opportunity and prosperity.
Sustainable leaders are adept at systems thinking and always will be aware that there is a bigger context beyond the immediate focus of the organization. They have the intellectual flexibility to see the big picture, as well as the capability to analyze the details of a strategy, and can shift perspectives quickly and frequently where necessary. Sustainable leaders can formulate a vision that inspires all stakeholders and can decide between competing interests.Systems thinking is the ability to see and understand interconnections and interdependence between actors (stakeholders, relationships, etc.), domains (social, economic, environmental), across time (past, present to future) and scales (local to global) to reframe challenges and opportunities for business and societal progress.A systems-thinking perspective helps leaders understand issues more comprehensively to identify leverage points to foster change. Multiple perspectives increase insights and options to improve organizational adaptability and agility. They are the only way to fully understand complex problems and may allow win-win solutions to surface even when dealing with entrenched conflict and competition. Systems thinking enhances leaders’ ability to observe and detect behavioral details in the activities of customers, suppliers, competitors, and others to foster and improve innovation.
Sustainable leaders do relationship building and understand people across cultures; embrace diversity; and build productive, long-term relationships with key stakeholders through dialogue, leading to concrete and positive results.Today’s organizational and societal challenges are too big and complex to be addressed by individuals or organizations working alone. The network of interdependencies creates mutual reliance in which collaboration is necessary for progressAn organization’s significant sustainability impacts are often found up or downstream of their operations, requiring collaborative effort with suppliers or customers to realize solutions. A collaboration ethic can generate loyalty and build social capital to enable strong relationships and foster organizational resilience. Companies need to reach out to others to shape the social context in which they operate and explore new market opportunities. Working across sectors and up and down value chains is becoming a business necessity as sustainability outcomes can only be achieved through collective effort tackling systemic blockages across whole markets.