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For most businesses seeking to achieve high performance, the nature and responsibility of sustainability has changed. What once used to be a sideline affair is now increasingly in the mainstream—and a key part of the chief executive officer’s agenda.
But most leaders are only just starting to think about what this means for them, and how to lead effectively in this area.
To help bridge this gap, this report draws on the insights and lessons of chief executive officers currently at the leading edge of sustainability. It provides a concise outline for how leaders can assess and implement sustainability in their organizations—and what the main issues are that need to be considered.
Although the specific focus of any given organization’s sustainability strategy varies hugely between industries and geographies, there are many common elements to how that strategy is created and implemented. Subsequent reports in this series will detail the implications of sustainability for other members of the C-suite.
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Chief executive officers face a daunting array of challenges, among them eroding consumer trust and resource constraints as a result of growing populations. Worries over climate change and other global issues are building.
Many of these issues converge under the banner of corporate sustainability, which is increasingly a catchall term for wide-ranging economic, social and environmental concerns. What is different today is that many chief executive officers are seeing new opportunities for competitive advantage from sustainability initiatives.
Sustainability is a key ingredient to rebuilding stakeholder trust , and it also presents a way of outmaneuvering weaker rivals. Specifically, it is the ability to take tough decisions for the long term in the midst of today’s uncertainty that will mark out tomorrow’s high-performance businesses.
One of the headline debates for chief executive officers lies in determining what management structure is most effective to ensure implementation of the sustainability agenda. One route lies in creating a dedicated C-suite role for this, typically in the form of chief sustainability officer.
Chief executive officers are masters at managing teams and tracking their progress across a range of measures. But in sustainability, chief executive officers need to think about which metrics actually tie back to the future of the business.
Another key issue for chief executive officers is maintaining the momentum of sustainability projects over the long term. One way is to create a culture of permanent improvement, while competitive forces can help in embedding sustainability. Explicitly linking performance on core sustainability objectives to executive remuneration will also help to ensure that leaders remain focused.
Most likely, though, the toughest challenge for chief executive officers will be balancing their long-term visions for sustainability with short-term financial demands.
As this report has outlined, the chief executive officer plays a fundamental role in supporting and driving the overall vision of sustainability for the organization. But as this vision is translated into objectives for specific parts of the business, the involvement of a range of other C-suite executives will be needed. The chief financial officer will play a critical role in setting the specific metrics and communicating those to shareholders, for example, just as the chief marketing officer will assess how to build sustainability into the corporate brand and positioning.
The reports that follow in this series will explore and detail the implications for ten specific C-suite roles in turn, starting with the role that provides the overall architecture for sustainability to fit within: the chief strategy officer.
January 30, 2012
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