In the last decade, business leaders have launched with great fanfare their organisation’s climate ambitions for reaching or exceeding net zero.
While this is certainly to be welcomed, as we move deeper into the 2020s, these same organisations are facing a very public moment of truth – have they demonstrated meaningful progress towards realising these ambitions or set out any credible pathways to success? With the release of the United Nation’s latest report, described as a “survival guide for humanity” by secretary general Antonio Guterres, the urgency of transparently asking this question of ourselves and business becomes critical.
The nature of most large companies is that they tend to be short- (at a push, medium-) term focused due to shareholder pressure for returns, c-suite churn, and the need to respond to all manner of commercial and contextual challenges that arise, such as the pandemic, supply chain disruption, and the war in Ukraine. These types of (admittedly serious) challenges for leaders make actively committing to a pathway to net zero, taking tangible action and prioritising, investment, difficult. It is increasingly clear that some of the tough decisions required have been delayed and ambitions watered down, with short-term commercial needs prioritised over longer-term planetary ones.
The problem for the emerging or soon to emerge generations of leaders is that we are now beginning a new critical phase in achieving net zero where urgent progress is required if we are to achieve anything like the 1.5°C target. With 51% of the world’s biggest publicly listed energy companies failing to disclose a decarbonisation strategy that sets out long and medium-term targets are these senior corporate personnel ready, willing and able to deliver what they are soon going to be responsible for?
In my conversations with our Partners, there is a fundamental appreciation of the fact that the next generation of c-suite professionals must make building the bridge to a sustainable economy a business priority – and a concern that clear pathways aren’t yet in place or in some cases even imagined. In this article I outline my view on where I think robust, collaborative solutions to enable people and planet-positive growth t can really make a difference.
A new phase of net zero – progress and delivery
Increasingly alarming climate reports, increasing mainstreaming of ESG metrics and greater exposure of green-washing all show we are in a new phase net zero – one with a greater stakeholder focus on action, impact and delivery. With as little as 10% of companies having set short-term targets (up to 2025), it’s now past time that organisations and their leaders grapple with the reality of incorporating sustainability into the core of their business strategy.
Accelerating the delivery of commercially viable and credible, pathways to planet-positive growth has implications across the entire value-chains of all businesses. What’s becoming clearer is that incorporating a net zero lens into how you source, operate, serve and grow in the future will take wholesale change; and this is something individual businesses will not be able to do alone.
Moving to accelerate impact, organisations need to view their strategy and operations in a new light and look at how cross-sector partnerships can work to tackle cross-sector value chain issues. Organisations with shared or complimentary value chains, unique strengths that can be matched and reciprocated between industries and competitive advantages or new markets found to co-develop solutions all have a role to play.
Our Build Ahead and Europe Delivers business-led coalitions are just two examples of collaborative groups of future focussed organisations looking to find and realise solutions to key challenges within their sectors and markets. In both examples, leaders have come together with a shared belief that businesses who work together can generate lasting impact and realise the ambition of promises made in the past.
The future’s ‘greatest generation’ of business leaders
Given the recent economic turbulence and a global cost of living crisis, it’s not surprising that consumers are now less likely to be willing to pay more for sustainable products than they were before the pandemic. However, research also suggests that if companies don’t accelerate their pace to net zero with a huge 55% of companies not on track. The emerging generation of business leaders will therefore be asked to do the impossible. Not only will they be required to accelerate progress toward meeting climate ambitions, they will need to do it while also delivering credible avenues for commercial value for consumers, employees, and investors.
To achieve this, we need this next generation of business leaders to prioritise training and enablement across the c-suite. Critically, training must be extended throughout the entire organisation to enable creation of a pipeline of people with sustainability at their core, experience and expertise in systems thinking, and possessed of the right mindset to deliver. This includes a better understanding of systems thinking, an openness to collaboration in a way not seen before and the ability to create a more sustainability literate workforce. Our Leadership Vanguard programme has been developed specifically to address this gap.
Even more important is a reengineering where companies place priorities for career advancement to reflect the behaviours we want to see, both financial and cultural. How careers are nourished, and individuals are valued and incentivised, will be key to unlocking the right types of behaviours and drive the innovations we need to see.
CHROs and CPOs need to look at more effective strategies and structures, acknowledging that it won’t be one size fits across the market and that innovation is required to ensure lasting impact. Embedding systems transformation leadership and moving away from financial incentives that focus primarily on ROI and efficiency will be key to creating a future where leaders are aligned with where the organisations environmental impact is felt and tackled appropriately.
It’s time to help
As immediate or wider stakeholders in working towards a commercially viable net zero transition, it’s incumbent on all of us to support leaders in delivering impactful progress, shifting away from accusations of ‘not fast enough’ or ‘not pure enough’ to ‘how can we help’.
The business world has growing pressure to deliver on net zero, and the emerging generation of leaders need to start preparing now for the challenge that faces them. Moreso, they should be demanding of their organisations support their need for personal upskilling as well as those of their teams to enable impactful change that brings employees, communities, value-chains and the wider societal ecosystem with them in tackling the challenge.
Or contact us to find out how we can help your leaders and organisation create people and planet-positive growth.