Why it’s time to embrace sustainability in the boardroom
As businesses continue to evolve in a challenging market, there’s been an increasing urgency to address sustainability issues at boardroom level. The recent attention on the lack of resources and climate change issues has paved the way for more focus on sustainability in the boardroom. We’re currently in an era where there are immense challenges around environmental, social and governance practices (ESG) – and many CEOs and senior leaders are being held accountable.
But what can boardroom leaders do to set a new standard? Positive and purposeful leadership are fundamental to creating sustainability throughout an organisation. In a time of digital innovation, it’s important for businesses to take a more strategic approach that considers new ethical and governance factors. Many companies have already shifted gears and made changes to their strategies and financial investments, in order to re-shape their organisational model.
The companies that thrive in the future will have made sustainability a priority. Embracing sustainability means moving away from simply being compliant, but instead showing a commitment to sustainable practices through structure and processes. Today, CEOs are being pushed to review their strategies and create clearly defined goals, which in turn, can create a more sustainable future.
Embedding sustainability into core board practices
If businesses want to stay competitive for years to come and continue to attract new customers, boards need to focus their budgets on sustainability while having a keen awareness of all the challenges and opportunities. This means boards need to address issues that are specific to their business. The nature of change needed to embrace sustainability will differ between companies. Some businesses may need to implement drastic changes depending on their model, but regardless, boards must take a holistic view and present risk assessment reports that evaluate the whole company. That way, boards will be able to agree on sustainability goals and have an easier time embedding new practices across the entire organisation.
Sustainability covers a range of areas including climate change, health and safety, supply chain and diversity. The market is more competitive than ever before and companies now are having to show they’re taking sustainability seriously, especially since much of the public expects businesses to be operating more consciously. A sustainable business simply means generating profit without negatively affecting the environment and societal conditions.
To ensure that sustainability has been fully integrated into a business, the board must identify the right leaders who can take control over all matters related to sustainability, and outline the core responsibilities. With a proper measurement for sustainability, boards can effectively hold their leaders accountable and challenge management when needed. Once businesses embed sustainability into core board practices, this can be communicated down the chain, and the wider organisation can commit to a better future.
According to research, 26 per cent of British workers would be willing to take a pay cut in exchange for working for a company that prioritises sustainability, with a further 80 per cent agreeing that the employer should take responsibility for their environmental impact. With increasing pressure from employees, it’s becoming all the more important for boards to demonstrate that their businesses positively serve the community. Embracing sustainability means thinking about how your company’s core values impact employees and to bring in new leaders who can sufficiently commit to sustainable business practices. This requires those in the board room to align their sustainability goals with the business model, in a way that contributes to employee engagement. In this way, organisations will be able to increase the value of their businesses by attracting and retaining the best talent.
Indeed, the expectation of employees is a strong case for sustainability in large companies. While many boards are struggling with the transition, there some companies who have embraced sustainability more quickly than others. For example, pharmaceutical company AstraZeneca has embedded sustainability into its core philosophy. It was ranked by Forbes as one of the most sustainable companies of 2020. AstraZeneca tackles a range of sustainability issues, such as ethics and transparency, the environment, and healthcare. The company’s commitment to ESG issues is clear, but why has progress been slow elsewhere?
Corporate culture starts at the top
Firstly, there’s been a lack of globalised metrics for assessing sustainability. Without clear guidelines, this has led to slower progress for many businesses. Also, there’s also the issue of companies trying to avoid being perceived as “greenwashing”. Nevertheless, boards still need to make an attempt to define their own measurement strategies and it has to start at the top, in the boardroom. In today’s era of business, CEOs need to create a culture of sustainability that sets an example for employees.
Boards need to make sure that sustainable best practices are ingrained into the heart of the company and communicate the results. Companies can take advantage of the reporting standards set by the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), to disclose their results. Another reason why boards must embrace sustainability and make sure the whole company is aligned is that it can improve a company’s brand positioning.
Becoming a business that has sustainability at the heart of its strategy and practices, shows clients and employees that they’re forward-thinking, and care about the future of society and the environmental impact. The only way to change a company’s culture is by having leaders that demonstrate new attitudes and behaviours, and to show they’re committed to the sustainability goals of the organisation. Companies that don’t adapt to the sustainability expectations can expect to find themselves falling behind. So, now’s the time to embrace sustainability in the boardroom.
We’re already seeing an increased interest in ESG and responsible investing roles at Hanover. We’ve set up a steering committee team to help our clients navigate their ESG hires and strategic plans. As we move through the year, we expect more businesses to focus on sustainability to make a positive impact on the environment.
Are you looking to recruit at board level?
At Hanover, we have an outstanding team of executive search consultants who have expertise in recruiting high-performing leaders. If you want to build sustainability in the boardroom, you need to select the best leaders who can drive your company forward. We provide in-depth leadership assessments and solutions and help you develop and manage your company’s leaders.
We’re able to identify candidates who are prepared to take on any challenge and help their company grow. If you’d like to find out more about our leadership solutions, contact Linda Dale, who has vast experience and knowledge of leadership. Alternatively, get in touch with our team today to see how we can help.