By Shawn Cooper
Canadians have seen their communities change drastically in the last few years due to the COVID-19 pandemic and heightened worry about climate change and social justice, motivating them to make sustainable changes in their everyday lives. Employees, customers, and investors are starting to expect more from the companies they buy from and work for. They are increasingly seeing businesses as an important contributor to the greater community and economic ecosystem of Canada.
Our Divides and Dividends research set out to find out how much progress Canadian corporate leaders are making towards sustainable business. We surveyed three groups of people — C-suite executives, next-generation leaders, and employees — to understand what a cross-section of Canada’s workforce thinks about their organization’s sustainability efforts and the readiness of leaders to advance the agenda.
We found bright spots of progress, as well as opportunities for Canadian business leaders to do more to accelerate their sustainability actions. First, the good news: Overall, 41 percent of C-suite leaders say their organization has a sustainability strategy that has been acted upon and clearly communicated. This is broadly in line with the global average (43 percent).
Notably, however, this optimism is not shared by others across the organization: just 24 percent of employees and 33 percent of next-generation leaders agree that their organization has a clearly communicated sustainability strategy. The fact that senior leaders are more optimistic than next-generation leaders and employees is a concern. A compelling vision and expert communication will be critical to mobilizing employees and fostering an authentic enterprise-wide culture of sustainability.
Our research also indicated that Canada is at the early stages of its sustainability journey. When we asked C-suite leaders why their organization was taking sustainability action, 42 percent cited brand management concerns — they wanted to be seen as socially responsible or reputable. By comparison, just 14 percent said value creation motivated their sustainability activities.
Actions For a More Sustainable Future
Radical transformation — including the kind required to transition to sustainable business — is tough to deliver. There is no pre-established playbook, and it involves many complex trade-offs. Yet those who succeed stand to unlock myriad financial and non-financial dividends — from faster top-line growth to more engaged employees, more loyal customers, and more supportive investors.
To achieve change at the scale and pace needed, it is important that leaders make sustainability a central strand of business strategy, motivating the transformation of operations and business models, and ensuring all opportunities are evaluated through a sustainability lens.
Realizing the shift to sustainable business will come down to one thing: leadership. Updating selection frameworks to ensure top executives possess sustainable leadership potential is a critical first step. Beyond this, rewarding those who lead sustainably, such as by tying sustainability outcomes to the remuneration of the CEO and executive team, can also help accelerate action on the ground.
Ultimately, executives who have the freedom — and vision — to completely rethink strategy, business models and operations, and the humility to bring others along on their journey, will likely have the biggest impact on sustainability.
Shawn S. Cooper is Managing Director, Board & CEO Advisory Partners at Russell Reynolds Associates. Shawn advises Canadian and international corporate and governance leaders on talent management and culture transformation, strategic succession planning, ESG and sustainability, and board composition and effectiveness. Shawn has served in several firm leadership roles, including the Global Executive and Operating Committees.