OPINION: Fostering sustainable leadership in businesses to ensure better corporate governance

Sustainability and the concept of a triple bottom line of profit, people and the planet have brought about a global paradigm shift in corporate perspectives. In 2015, world leaders at the United Nations Development Summit agreed to adopt the sustainable development agenda for 2030. But, in order to achieve Sustainable Development Goals (SDGs) globally, we need multi-pronged, integrated approaches, including collaborative work from business leaders.

Why do we need sustainable leadership?

Every business is part of an ecosystem, be it virtual or actual. They cannot afford to be oblivious to green practices as consumers increasingly demand environment-friendly products, and it makes business sense to be greener.
A 2021 study from the World Economic Forum calculates that India’s decarbonisation journey will create $15 trillion in business opportunities by 2070. It goes without saying that to achieve this level of sustainable growth, we need leaders who are committed to the triple bottom line of social, environmental and financial benefits.

How should leaders foster sustainable practices?

Sustainable leadership is not one-dimensional and is all about a holistic sensitivity to issues like climate change, hunger, and inequality. Hiring candidates with ecological sensitivity and building strong business partnerships to tackle environmental challenges are also signs of sustainable leadership.
Energy efficiency, recycling, waste segregation, eco-friendly supply chain, removing single-use plastics, adding green walls and oxygenating plants to the interiors, and collaborating with government bodies, NGOs, investors, and communities to find planet-friendly solutions can foster sustainability in industries, workplaces and beyond.
Companies should also develop long-term plans to reduce carbon emissions and focus on ethical sourcing and regenerative products. Creating leadership modules to prepare the next generation of change-makers is also essential. Encouraging or incentivising volunteering can also create a work culture of eco-sensitivity. Be it beach cleanups, plantation or gardening projects, or sharing professional skills with non-profit organisations, every small initiative contributes to the big picture.
An ESG (Environmental, Social, and Governance) analysis of sustainability initiatives also brings much-needed transparency. Sustainability is also about ethical labour, hiring practices, and gender equality. So, every organisation must work towards becoming as inclusive and fair as possible. And, of course, no leader can know it all, so learning this new skill is all the more crucial!

Why upskilling is critical to sustainability

A 2021 World Economic Forum article indicated that the viability and health of our societies would depend on equipping our workforce with the skills needed by the digital economy. And that companies that digitally upskill their employees play a crucial role in social sustainability because a skilled and adaptive workforce remains steady and is not rendered redundant.
In India — one of the world’s largest labour markets — only 12% of the workforce has digital skills, says the WEF report. This is despite the fact that demand for skilled tech workers is expected to rise nine-fold by 2025. For us in India, upskilling and reskilling the workforce is no longer optional for socio-economic and environmental sustainability.
Many companies have started to link performance appraisals to sustainable targets. This way, the frontline staff and strategic level managers see the impact their work has created for themselves.

Create a blueprint for the future

A vision for the future means we work towards caring for the planet in incremental as well as substantive ways, including caring for all those who inhabit this earth. As I mentioned before, hiring employees with diverse demographic profiles, investing in grassroots organisations, and following sustainability practices are essential, and they also make good business sense.
The WEF's 'Future of Nature and Business 2020' report stated that transformations in the way we use food, land, and ocean, build infrastructure and consume energy and resources etc., can generate an estimated $10 trillion in business value and create 395 million jobs in just a decade. Hence, business leaders must create a cycle of responsible consumption and production and consider how they can help communities access education, health care, clean water, and sanitation. Ultimately, sustainable businesses depend on sustainable societies.

Go beyond the optics

Consumers and stakeholders today need businesses to do more than just invest in marketing strategies and optics. This is why contributing positively to the community and making sustainability a guiding principle is important. This also entails changing policies and processes, recalibrating how employees are trained and recruited, and weaving sustainability in leadership strategies and the supply chain.
A 2021 Forbes report indicated that unsustainable businesses tend to be unviable in the long run. This is why it is necessary to build your company's brand equity with authenticity and integrity to attract and ensure brand loyalty and like-minded collaborators. As a leader, it is essential to prioritise your employees' personal and health-related needs and build a culture of rewards, recognition, open communication and redressal. As the pandemic showed us, no company can survive a curveball without a committed workforce.
When corporate governance is tied with sustainability, transparency and fairness, an organisation can maintain a good balance between profit and social and environmental accountability. A report by United Nations Global Compact and Russell Reynolds Associates discovered that there are three types of sustainable leaders - The Awoken, The Born Believers, and The Convinced. The point is that even those who have not yet discovered the benefits of building sustainable businesses can at some point be convinced to wake up to new potentialities and co-create a greener future.
Alok Bansal is the MD of Visionet Systems India and Global Head of BFSI Business
This column is part of a year-long (2022-23) campaign on the theme “Only One Earth: Sustaining People, Planet and Prosperity” by Business Insider India’s Sustainability Insider.
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Disclaimer: The opinions expressed by the author/interviewee do not necessarily reflect the views of Business Insider India. The article has been partly edited for length and clarity.