5 minutes read: OpEd C-suite 2024 Sustainability Challenge : Lead or be led.” – This Catalyst edition was previously published as a Thought Leadership piece for Farrell Associates | Certified B Corp™ .
So New-Year’s Eve 2024 went and now a “fairly large number” of companies in Europe are facing a “little” new sustainability disclosure requirement called “CSRD”.
In a C-suite position? Brace yourself as CSRD is an order of magnitude more complex than just reporting on your carbon footprint…
“So what? It’s just another environmental disclosure requirement. Let our head of sustainability reporting take care of it.” Well … not quite…
If you think you won’t be affected by it because you’re in IT, Marketing, HR, Procurement or some other function, think again. Because CSRD comes with a holistic view of what does a true “environmental footprint” and “materiality” means. If you think CO2 was tough, just wait until you dive into your water footprint throughout your company’s operations or your biodiversity impact…
And that’s just the beginning because the EU don’t just want a report on your activity’s environmental footprint of last year … they want to know if you have designed a Climate Transition Plan and are able to explain how your company will deliver on it. Sorry, you can’t play the carbon-offset card again… Time to engage a full-scale deep dive across your organisation to figure out what will be your plan.
If you think this is something you can side-step – think again as with more customers, shareholders, finance institution focused on improving the environment, the companies that will leverage the CSRD constraint to create a strategic growth advantage will be dominate their market.
“Lead or be led” is your only choice according to Larry Fink. BlackRock CEO’s.
Amping Up Sustainability in the C-Suite: A Strategic Imperative
Now is the time for C-suite leaders to embrace the new reality & tune-up their knowledge and skillet on Sustainability. Based on my experience, there are 7 key characteristics any C-suite member should strive to develop or enhance to navigate the coming turbulences.
1. Long-Term vs Short-Term View:
In the ever-evolving business landscape, C-suite executives who maintain a long-term perspective are invaluable. These are the visionaries who never lose sight of the endgame, balancing immediate results with sustainable growth. Addressing the CSRD’s Climate Transition Plan requires such a long-term view because the name of the game is simply to make sure the company is still in business 10 years from now.
2. Systemic Thinking & Ripple Effects:
Executives with a knack for systemic thinking can discern the intricate web of cause and effect in business ecosystems. These leaders are adept at zooming out to anticipate the far-reaching implications of their decisions, ensuring that today’s solutions don’t become tomorrow’s problems. The new CSRD requirements provides just the right incentive to take a step back and consider the company and its place within the industry value-chain.
3. Leaders Who Serve:
The new era of leadership is about empowering others. Success is never defined by just writing an ambition on a white board. Success comes when C-Suite leaders engage their entire team in co-defining the best way to achieve the goals. This approach not only boosts morale but also drives innovation and commitment.
4. Savvy Stakeholder Management Skills:
Effective stakeholder management will crucial to deliver positive impact at scale. Because the crux of the matter will not be on what needs to be fixed inside organisational silos. The toughest issues will always be cross-functional ones. That’s when C-suite leaders, acting as integrators, ensuring seamless cooperation across departments / functions and aligning varied interests towards common sustainability goals, is essential for success. Essential as the CSRD disclosure will require many data points and measures from around the company.
5. Ecosystem Engagement Willingness:
Sustainability-aware leaders recognize that what is “Scope 3” for them might be a “Scope 1” concern for their value chain partners. The good thing is that a fair number of said partners are very likely to also be in the scope of CSRD, giving organisations a common ground to start cooperating. Time for C-Suite to develop a knack and an appetite to drives responsible and collaborative approaches…
6. The Courage to Re-Design:
The business world needs leaders bold enough to challenge the status quo. These pioneers are willing to leverage alternative materials and technologies to rethink their core products and services. It’s about having the courage to innovate and reshape industries for a sustainable future – and it can be done – just look at Elon Musk’s success with Tesla redesign of what a car is, from the ground up.
7. Focus on Sustainable Recruitment:
Sustainability is not a standalone goal; it should be woven into every aspect of operations.
That’s why your people strategy must ensure that leaders recruited know how to embed sustainability into their domain’s daily practices. And that doesn’t just apply to C-Suite leaders, it should be true of every position across the company.
Elevating sustainability in the C-suite is not just about having a dedicated Chief Sustainability Officer. It’s about ingraining sustainable thinking and practices in every leadership role, ensuring that every decision made is a step towards delivering on the company’s Climate Transition Plan.
