Sustainable Leadership: Are you ready for the new leadership revolution?
Updated: Jan 13
We came up in an industrial economy built on management and management is not the same as leadership. Leadership is exploring the edges; leadership is this idea of finding problems and solving them.
By Nicoleta Talpes
January 13, 2021
I don't think anybody can describe the last two years as business as usual. In 2022 the business environment around the world is operating in a complex, uncertain, and ever-changing context. From the impact of the global pandemic and the need to build a more inclusive and resilient society to the digital transformation and the urgency of conserving limited resources and protecting nature, society looks to leaders for solutions.
The world has become increasingly aware of the impact of business on the triple bottom line, also known as the three P's - people, planet, and profit - and in the meantime, organizations are looking for sustainable leaders who can create value for stakeholders and they can balance in the short and long term. But can leaders accept the complexity of this responsibility, producing the necessary short-term profits and providing long-term sustainable solutions at the same time? Studies show that being responsible and adopting sustainable leadership is profitable. Measuring success for companies is often calculated in financial returns, but when financial performance is measured alongside ESG levels, research shows that companies performed much better when they had higher ESG indicators.
The 2021 Sustainability Leaders Survey highlights the significance and urgency of sustainable development issues and ranks the corporate sustainability leaders. Among corporate sustainability leaders, Unilever, Patagonia, Natura &Co, and IKEA top the charts by a significant margin (2021 GlobeScan/SustainAbility Leaders Survey).
Sustainability has become more than a common term. Its integration in every business decision regarding the development of a company is now a global trend to which more and more leaders from all fields are trying to apply a new way of doing business. Implementing a strategy to transform into a sustainable business requires the presence of appropriate capabilities within the organization to enable it to integrate and reconfigure available skills (internal and external) to effectively address the great challenge of sustainability. In addition, the transformation of sustainability is specific to the need for sustainable leadership, or a managerial action based on qualities and defined.
This transition from traditional leadership to sustainable leadership involves a change management process, which is still at the beginning. We came up in an industrial economy built on management and management is not the same as leadership. Leadership is exploring the edges; leadership is this idea of finding problems and solving them.
Sustainable leadership. What are the characteristics of a sustainable leader?
Sustainable leadership is a process of influence, a commitment to contribute to social, environmental, and economic issues to create a better world.
A sustainable leader is a person capable of identifying, inspiring, and implementing strategies, policies, managerial behavior by the principles and goals of sustainability.
Sustainable leaders have a vision beyond immediate, short-term gains to see the role their organization plays in a broader context. They establish strategies and ensure the achievement of results that meet the 3 P's, the triple-level of social, environmental, and financial performance.
There are several key competencies required by sustainable leaders, as opposed to other more established leadership styles: a strong inner sense of purpose combined with a long-term orientation and an inherent motivation to achieve the triple result, intellectual flexibility to see the image as well as to appreciate the details - and to change the perspective between competing interests to develop a strategy that inspires all stakeholders, an understanding of people around the world (Sustainable leadership: Talent requirements for sustainable enterprises, Russell Reynolds Associates, 2015).
Sustainable leaders have certain values (environmental sensitivity, human solidarity, economic and social justice), must be endowed with certain personality traits (open-mindedness, empathy, generosity, holistic thinking), must follow a managerial style (visionary, creative style, including). In addition, the sustainable leader must have specific skills, directly related to the role, and managerial skills, such as understanding and managing context and interdependent, long-term vision and change management, stakeholder orientation and value creation commune, creativity and aptitude for innovation and redefining business models (Pastore 2020: Sustainable Leadership in Europe).
The importance of sustainability indicators will increase in the next 5-10 years, and companies will be evaluated according to the actions they have to take to protect the environment. Migration to green energy, green financing, recycling, resealing programs, or the marketing of sustainably created products are some of the trends that will become the "norm" for the way business will be done in the future. But to succeed, everyone in a company needs to work together to make sustainable leadership an essential model that is appreciated by corporations around the globe and that humanity now needs.
Nicoleta Talpes is an entrepreneur, strategic communications expert with a 14+ year track record of advising companies and startups. European Climate Pact Ambassador with strong expertise in communication for sustainable development, developing projects in order to inform, inspire and support climate action. Starting January 2022 she has joined The Private Investment Group team with a mission to mobilize capital for building a more global sustainable business environment and to make a positive impact on global society through the private sector.