Sustainable future needs purposeful leadership model
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Sustainable future needs purposeful leadership model

Although global organizations are steadily shifting their focus to environmental, social, governance (ESG), and sustainability factors, their strategies and efforts will continue to fall short over time. Collective action led by purposeful and courageous leaders to solve the world's current problems would result in a more extensive transformation, allowing businesses to thrive.

Climate change is one of the most pressing issues plaguing the world today. Along with governments and individuals, corporate organizations have a responsibility to find solutions instead of creating problems. In fact, many companies include corporate social responsibility (CSR) and ESG among their sustainable development goals. However, according to Paul Polman, former CEO of Unilever, these efforts will turn out to be futile in the long run unless there is collaborative action that has purposeful leadership at its core.

Business and society are co-dependent

Current food production systems and food waste management are among the factors that damage biodiversity and trigger climate change. "The way we produce, consume, and waste food – this whole value chain isn't sustainable," points out Marisa Drew, Credit Suisse's Chief Sustainability Officer and Global Head of Sustainability Strategy, Advisory, and Finance, referring to a Credit Suisse report entitled "The global food system: Identifying sustainable solutions." According to the Food and Agriculture Organization of the United Nations, in 2014 the cost of food waste1 was estimated to be over USD 2.6 trillion. Furthermore, the 2019 World Resources Report found that food loss and waste account for 25% of all water consumed by agriculture each year.

The private sector needs to play a significant role in resolving these issues and addressing the climate crisis, because as Polman points out: "Business cannot succeed in societies that fail, nor do I believe that business can be a bystander in a system that gives it life in the first place. Business needs these sustainable development goals. But the sustainable development goals also need business."

In other words, "sustainability is an investment, not a cost." Furthermore, our findings show that social and sustainability bonds are heavily interwoven into funding.2 As a result, a company's attitude to sustainability is a game-changer. "I think we've become more aware that companies run under the longer-term multi-stakeholder model with purpose at their core, really integrating ESG and that total strategy, have done much better than others. We've never seen so many funds moving into ESG and getting better performance," states Polman.

The road map to becoming a purposeful leader

Paul Polman's leadership concept provides a road map for businesses to succeed and contribute to solving the world's problems. The first step of the transformation involves people. It is easier to drive holistic change once CEOs acknowledge that sustainability should be the focal point and that corporations should invest in it.

The former Unilever CEO presents an example of how practical the leadership training can be: "Collectively, the CEOs become more courageous, and we work on the systems and changes that are needed. We've put together, for example, 70 companies in fashion – a very destructive industry. And together, they're working on moving to regenerative cotton, integrating the Paris agreements, abolishing single-use plastics in B2B. The things that none of these companies could do alone."

Another key step is to adopt a multi-stakeholder model that avoids short-termism. To maintain engagement and attract the ideal shareholders who will endorse the company's decisions, long-term plans and strategies are essential. In the end, it all boils down to establishing goals and determining your organization's mission. With a purpose and co-workers who share it, you can evaluate where and how to have the broadest influence.