74% of investors withdraw their money from companies that perform poorly in terms of sustainability, according to the 2021 EY Global Institutional Investor Survey Report. As a result, organizations need a new kind of leadership that puts the long-term sustainability of the world first. Leaders from all disciplines must work together to change corporate culture, develop long-term solutions, and exercise creative thinking in order to address the serious environmental concerns related to nonrenewable energy use, climate change, and greenhouse gas mitigation, among many other issues. Consequently, senior executives need to develop new skills and competences in order to foster sustainable leadership across multiple sectors.
What is Sustainable Leadership?
Sustainable leadership is a management approach that provides solutions for environmental, social, and economic challenges in the world. It acknowledges leadership as an influence process and deconstructs silos to make leaders work collaboratively for change and transformation.
Sustainable leaders understand and embrace the growing complexity of the world, which makes them more adaptable. Most significantly, they are long-term thinkers who see people and the environment to be integral parts of the business. Guided by strong values, they undertake bold steps that prioritize the organization’s impact on future generations and not just the current quarter. With these qualities embedded in their management approach, sustainable leaders prepare the organization for success and growth.
Importance of Sustainable Leadership
According to the Value Reporting Foundation, 68 out of 77 industries are already suffering the negative consequences of climate change. It is not hard to predict that environmental catastrophes will keep upsetting the world’s supply networks and obstruct access to food and energy if organizations do not employ sustainable leadership in their business operations.
Moreover, sustainable leadership is also important as businesses that respect sustainability are increasingly attracting top talent and customers. On the other hand, businesses that don’t take reasonable action to meet sustainability goals are falling behind. Therefore, organizations must build new modes of operation that support the interdependent systems of business, humanity, and the global environment by cultivating decision-makers who share the qualities of sustainable leaders.
Sustainable Leadership Examples
AeroFarms Mission to Transform Agriculture with People and Planet in Mind
David Rosenberg, CEO of AeroFarms, announced their bold mission to transform agricultural practices keeping both people and the planet in mind. The New Jersey-based company uses the latest technology in vertical farming and plant biology to repair the broken food system and improve ways to cultivate and distribute fresh produce. Currently, AeroFarms’ business model meets 12 out of 17 United Nations (UN) Sustainable Development Goals (SDGs) and won the Global SDG Awards in 2021 celebrating private sector initiatives in the advancement of the UN 2030 Agenda.
Wander+Ivy’s Attempt to Reduce Plastic Waste
Dana Spaulding, founder of Denver-based Wander+Ivy, addressed the problem of wine waste, which is an estimated $1.3 billion dollar issue worldwide. By partnering with sustainable wine producers who use certified organic grapes packaged in attractive and reusable glass bottles, the company ensures wine lovers can enjoy a glass of wine without having to compromise on quality and sustainability.
Sustainable Leadership Principles
Sustainable leaders strive to drive a positive change by building sustainable enterprises that reduce the impact of operations on the natural environment. To achieve this objective, they should work toward implementing the following five principles of sustainability leadership:
1. Having an Ecocentric, Systemic, and Long-Term Mindset
An ecocentric (or ecological) mindset underlines the fact that humans are a component of the global ecosystem and not separate from it. Top leaders should inspire emerging professionals to incorporate this insight into their worldview to reduce the negative impact that people have on the environment.
2. Establishing a Cross-Boundary Leadership Network
Sustainability leaders establish a cross-boundary leadership network by collaborating with leaders in different roles. Project executives, thought leaders, subject-matter experts, and trusted advisers may all be part of this leadership group. By coordinating action points, strengthening connections, and transforming key strategies into actions that appeal to various stakeholder groups, sustainable leaders create a shared vision for achieving change.
3. Exercising Influence Without Authority
The key to sustainable leadership is influence, not authority. Sustainability leaders need to exercise their influence across the world to vast, diverse groups of people, among whom they might not have any authority. Therefore, leaders must develop credible power by strategically engaging in social networking to build a relationship with employees and exercise influence without having any formal authority.
4. Working with Complexity
There is rarely a defined consensus on how to address organizational challenges. Hence, a core skill for leaders include distinguishing between various leadership types and selecting the appropriate leadership style to resolve problems, depending on the nature of the challenge. Thus, sustainability leaders must be comfortable working with various complexities that involve factors such as stakeholder needs, politics, competing interests, and natural systems.
5. Recognizing the Importance of Leading Oneself
Prioritizing self-leadership by increasing self-awareness of sustainable values and purpose is a fundamental component of sustainable leadership development. Sustainability leaders who understand the importance of first leading themselves have a clear sense of the aforementioned purpose and values and are strongly driven to encourage others to discover theirs.
What are the Characteristics of Sustainable Leadership?
It is important to understand the key characteristics of sustainable leaders as distinct from other more established leadership styles. To make the difference clear, we have broken down the following characteristics into five main areas:
1. Sustainability Mindset
This implies a strong sense of purpose paired with a long-term orientation and an inherent ambition to achieve the sustainability bottom line.
2. Systems Thinking
Systems thinking involves the intellectual ability to observe and focus on the bigger environmental issue. It also requires changing the perspective between conflicting groups by developing a strategy that inspires all stakeholders.
3. Relationship Building
Sustainable leaders should understand people across different cultures, supporting diversity, and building productive, long-lasting relationships with stakeholders.
4. Continuity of Commitment
This means understanding that most complex challenges require long-term, adaptive management and being committed to foster change.
5. Effective Communication
Sustainable leadership requires advanced skills in active listening, storytelling, creating a shared vision, conflict management, and the capacity to motivate and convince other people.
What Role do the Leaders at the Top of Organizations Play in Shaping a Sustainable Future?
Senior leaders influence the culture of the organization through their own actions and the way they collaborate with other people. They set the tone by prioritizing sustainability leadership in their strategy and core beliefs. They develop self-awareness and analyze their own relationship with the current social, economic, and environmental issues. Additionally, sustainability leaders evaluate how their present organizational strategy contributes to a net positive impact on the world. They consider the changes they can make to contribute in a more sustainable way over time. Therefore, senior leaders play the role of facilitator to foster a collaborative environment for their team members, stakeholders, and clients in order to shape a sustainable future.
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