In times of volatility, Corporate Sustainability Leadership guides legislation and successfully manages internal risks.
In this age of globalization, CEOs and the entire C-suite must focus beyond their office buildings, factories and retail outlets. To protect their interests, employees, suppliers and vendors, they must and do affect policy, regionally, nationally and globally.
Recently, a group of companies including GlaxoSmithKline, Unilever, Coca-Cola, Interface and United Technologies signed a statement encouraging the EU to set the stage for a climate-neutral economy by 2050. While there is certainly a component of altruism to their request, their motives have a basis in economics. Long-term certainty makes for economic prosperity.
If you doubt that companies believe this, look at what happens to the markets whenever there is extreme volatility. Investors want certainty, even if that certainty may lead to increased oversite, legislative restrictions and even taxes.
Just as the Centre for Sustainability and Excellence (CSE) research shows increased profitability among those companies with a strong sustainability strategy, multinational corporations have run the numbers. They believe the economic value of achieving a net zero economy by 2050 is greater than the economic benefits of less ambitious goals.
Companies know their factories are in threatened coastal zones. They know their employees are at risk of poor health from air pollution, hunger, increased costs of living. At a corporate level, wielding the power of the purse, corporations can influence policy for the good of their revenue stream and the good of the communities which drive their profitability.
Larry Fink, CEO of Blackrock, wrote in his annual letter to the companies in which Blackrock invests, “the world needs your leadership.” He said purpose and profit are inextricably linked. “Stakeholders are pushing companies to wade into sensitive social and political issues,” he wrote, “especially as they see governments failing to do so.”
CEOs and the whole C-suite need to be sustainability experts. They must address geopolitics, talent acquisition and retention, international supply chains, national legislation and global commitments not only from their countries of incorporation but from the countries in which they have holdings, factories, and employees.
What they need to know should not be left to “on the job” training nor delegated down the ranks. Corporate heads need to come together as a cohort of leaders, learning from each other and driving changes outside their domains which are inextricably linked to their own success.
Want to learn how to leverage sustainability efforts to demonstrate global leadership and impact? Attend the Centre for Sustainability and Excellence Sustainability (ESG) Leadership Training Workshop for C-Suite Executives, June 4-5, 2019, in New York, an exclusive limited gathering of corporate leaders. CSE specializes in global sustainability consulting, research and training. Participants include governments, NGOs and Fortune 500 companies. CSE is accredited by CMI, Green Business and is a GRI organizational stakeholder.