Looking for Leaders to Create a Culture of Sustainable Business

 
In order to successfully address problems such as resource scarcity, pollution, declining biodiversity and global population growth, sustainable ideals must permeate business.

 

While there will always be the lure of using un-ecological methods to cut corners and make ‘a fast buck’, it is imperative that sustainable business practices become the norm. Currently, most organisations are a far cry from this approach.  However, it is business leaders such as CEOs and senior managers who have the most power to affect the uptake of sustainable ideals and infuse their companies with an ethos of responsible business. Therefore, it is these business leaders  who must be at the forefront of the push to integrate sustainability into business thinking. More than anything, sustainability makes more business sense – even to the financial bottom line.

 

Some CEOs, such as Paul Polman of Unilever, our 2011 Grand Prix Winner, clearly believe that sustainability is not only the right thing, but the smart thing for long term business stability and success. Polman has stated that he wants Unilever’s ambitious and laudable Sustainable Living Plan to act as a positive example for the business case for sustainability. Unilever are making good progress towards their targets; they plan to source 100% of agricultural raw materials sustainably by 2020, and have already increased the amount from 14% in 2010 to 24% last year, so it is no surprise that Unilever’s share price has steadily increased following adoption of the Sustainable Living Plan.

 

The actions of pioneers such as Unilever notwithstanding, sustainability is not among the top priorities for most business leaders. The recently published 15th annual Global CEO Survey by PricewaterhouseCoopers (PwC) may appear a bit misleading towards CEO priorities as it does not directly refer to sustainability. Almost no sustainability-related risks were mentioned as concerning the interviewed CEOs, with ‘energy costs’ being sole sustainability-connected risk and coming last in the issues list in 3 out of 4 regions. However, on closer inspection,  improving efficiency and managing risks were the 3rd and 4th top personal priorities for CEOs and these are closely aligned to moving toward sustainable growth. Despite the PwC survey generally being a reliable barometer of CEOs’ opinions regarding sustainability, the outlook is more encouraging when specifically asking their feelings on the subject.

 

A more positive outlook is provided by Timetric’s Global CEO Sustainability Outlook Survey 2012. Along with being specifically focused on obtaining senior executives’ opinions on the meaning, implementation, measurement and management of sustainability, the survey also links sustainability to profitability, thus connecting two business imperatives.. The survey found that 43% of overall industry suppliers expect to see an increase in profitability over the next 12 months due to implementation of sustainability, suggesting that in some cases, simply switching to more sustainable practices produced a financial return. Respondents were found to be influenced by cost, efficient operations, competitive advantage and client demand, so the decision for companies to become more sustainable will depend on changes having a positive impact on these factors.

 

The imperative that arises out of these surveys and discussions is to find the best way to align responsible, sustainable business with enhanced operations and financial returns. While it may be enough for companies to focus on the tried and tested actions such as waste reduction, recycling, more efficient water and energy use, and other traditional CSR actions, at the board level, a more radical approach is needed than simply adhering to the triple bottom line. Business leaders and CEOs need strong, visionary leadership in order to convince not only their employees but their shareholders that making moves towards sustainable business is sensible in terms of the long-term health and resilience of the company. In order to achieve this, they must believe it is not merely sensible, but right.

 

Recognising a broader array of values, and adopting a value-led business strategy will create a corporate culture where creativity and diversity are rewarded and encouraged, leading to greater innovation and faster progress. In encouraging collaboration and sharing value, business leaders can reject traditional business practices and embrace the inherently uncertain nature of a rapidly changing business landscape, and the bold new ideas that are needed in order to create a sustainable world.


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