Nearly a decade after the Companies Act 2013, sustainability is no longer seen as just a compliance box to tick. More and more businesses are awakening to its potential to radically change company fortunes for the better. It has become a driving force of business success in the next decade—and beyond. Yet, transitioning an organization to a more sustainable future is not easy. While many are firmly committed to sustainability action—and convinced of its centrality to business strategy and long-term competitiveness—delivering tangible results can often prove elusive.
A recent study done by a global advisory firm pointed out that in India, C-suite respondents and employees agree that the global pandemic is the biggest threat to the future of society and the top challenge affecting their workplace. Beyond this, employees are looking to leaders to help fix a host of challenges—from megatrends like climate change and gender parity to issues closer to home, such as employee health and wellbeing, fair pay, and equal opportunities for advancement. Leaders must ensure their sustainability strategies bridge macro and micro concerns.
Where do business leaders go from here? As the past year has shown, considerable economic, environmental, and social threats continue to divide our societies. The idea that private enterprise will become part of the solution will only become more prevalent. Employees, customers, and investors have clear expectations for businesses to do much more, much faster.
Ultimately, sustainability cannot be an add-on to a business strategy, it must be an integral & core part of the business strategy This can only be achieved with bold leadership. Executives need the vision to strike a different path, the grit to overcome obstacles and the courage to stay the course in the face of setbacks. Those who do will benefit from triple-line dividends—from faster top-line growth and more resilient supply chains to greater employee and customer loyalty.
In order to deliver tangible results and make sure that the sustainability transformations “stick”, leaders should adopt the following guiding principles.
Sustainability must be intertwined with business strategy and aligned with metrics that make sense for the business from a future market perspective.
This is an area in which Indian leadership has traditionally struggled but is quickly catching up. Sustainability leaders must frequently collaborate with business units to translate SDG goals into tactical business initiatives which remain relevant from a market perspective as well. Target setting is also critical so that businesses are being aspirational but also pragmatic at the same time. Employees tend to be often much more sceptical about leadership actions and progress on sustainability than the leaders themselves. It is crucial that leaders make employees and the communities in which they operate central to how they build and communicate their sustainability strategies.
Prioritization is critical— Solving all 17 SDGs in their business is not an easy task, if companies are able to focus on 2-3 SDGs that align with their business strengths, that will make the effort more effective. Businesses should identify their areas of competitive advantage and unique differentiators in the marketplace, then leverage them to maximize social and financial value creation (for example, a global logistics company using its proprietary expertise to help governments coordinate disaster relief).
Aligning the entire team—from the top down—on the sustainability goals and allowing them to permeate the workplace culture would also help move the needle. Sustainability leaders need to have the appropriate level of leverage in the organization to be able to co-share the responsibility when sustainability targets are set out. Often, initiatives do not have an immediate business impact, so motivation to drive change and stick with it comes when sustainability finds the right pedestal in the organization. Connect the dots between macro and micro issues to explain how organizational practices and priorities support business outcomes.
Treat employee engagement as a strategic imperative. Strategic goals (sustainable or otherwise) are harder to achieve when workforces are not engaged. Pay attention to issues of diversity, equity, and fairness—and don’t fall into the trap of managing perception. Instead, identify and tackle the root causes.
Finding and developing the "mavericks" to lead this by example – not necessarily Corporate Social Responsibility (CSR) heads but also strong business/technical/ functional leaders with the right competencies to drive change; two data points we can cite that support this point:
The skillsets of sustainability function leaders are changing dramatically and rapidly. Among chief sustainability officers appointed 5+ years ago, the three most common functional backgrounds were marketing/comms, legal/regulatory, and government affairs; among those appointed in the last 5 years, the most common skillsets are operations/supply chain, corporate strategy, and finance.
A study showed that Indian Next-Gen leaders are particularly well positioned to ascend to the C-suite in the next 5–10 years with significant sustainability expertise: 70% of Indian Next-Gen leaders have taken on 3 or more sustainability-related job responsibilities, compared to only 40% of global Next-Gen.
We have also observed that key senior talent in sustainability in Indian businesses has grown through various roles such as sales, marketing, branding, etc., and then moved into the space of sustainability. This also helps sustainability leaders develop a strong relationship with business leaders backed by relatability to the BU rather than a checklist exercise to deliver on initiatives. This helps with a more realistic and, in some cases, potentially brave aspiration setting.
Make sustainability-related responsibilities a core element of next-generation leaders’ roles and put in place measures to enable, empower, and reward employees for driving sustainability outcomes.
Also, more tactically, in a post-pandemic world, a more productive workforce can be one way to drive sustainability – the increased use of technology, more tolerant policies, and a better appreciation of D&I could all improve sustainability metrics while also driving workplace productivity.
As the rest of the world wakes up to the potential of sustainable business over the next decade and beyond, it is likely that India will become a significant pool of sustainable leadership talent for organizations across the globe. To realize this opportunity, C-suite leaders must continue to invest heavily in their bench of future executives. Given the scale of environmental, social, and ecological challenges—both domestically and internationally—this is not a time for complacency. C-suite leaders that continue to expose next-generation leaders to a wider range of crucible sustainability experiences will stand the best chance of safeguarding their organization’s long-term success in a new era of stakeholder capitalism.