BSR Conference 2012: Fast Forward / October 23-26 / New York

Sustainability and Leadership Competencies

Two-Hour Working Session Session / October 26, 2012

Speakers

  • Geoff McDonald, Global Vice President, Human Resources, Unilever
  • Janice L. Semper, Manager, Executive Development, General Electric Corporate
  • Ron Herbst, Director, Global Head of Energy and Sustainability, Deutsche Bank GLS
  • Anita Hoffmann, Managing Director, Executiva
  • Laura Gitman, Managing Director, Advisory Services, BSR (Moderator)

Highlights

  • To address our current global challenges, we need a different kind of leader with a different or redefined set of competencies.
  • Fostering sustainability leadership requires true integration of sustainability in every business function, management system, and decision-making process, as well as in employee expectations and performance evaluations.
  • Leaders need to take a less hierarchical approach to leadership. Instead, they need to be more inclusive and become someone you learn from, not just someone from whom you take orders.

Memorable Quotes

“There’s a natural point in the [sustainability] journey when it’s appropriate to start thinking about sustainability competencies and what leaders should do.” —Anita Hoffmann, Executiva

“To make [embedded sustainability] personal, you need to lead by example. You need to include the ‘why’ but immediately get to the ‘how.’ Stand behind your leaders as they solve the problems.” —Ron Herbst, Deutsche Bank GLS

“It’s about getting your leaders out of the business and into the world. It’s about getting them immersed … We need to put leaders in these situations so they can make more informed decisions.” —Janice L. Semper, General Electric Corporate

“I think it’s about how we engage leaders on sustainability, not as a separate issue, but rather at the center of how we do business.” —Geoff McDonald, Unilever

“Just because you work in the sustainability space doesn’t mean that you have the sustainability leadership competencies.” —Session participant

Overview

Gitman opened the session by introducing each of the speakers and posing the following question: How can we push sustainability and leadership competencies in your company? She explained that in conversations about leadership, we focus on companies rather than individuals, which can be attributed to a current competency gap. Gitman stated that we need a different kind of leader to address our current global challenges.

To provide more context, Hoffmann explained the results of a recent report on the topic (see full report here). This report describes the competencies necessary for senior managers, executive teams, and boards to lead with sustainability in mind. It identifies five traits of leading sustainability companies: living with uncertainty and complexity, valuing difference, a relational enterprise, stepping outside the system, and leaders developing leaders. The report also identified six core competencies that are necessary for sustainability leadership: ethics and integrity; external awareness and appreciation of trends; visioning and strategy formulation; risk awareness, assessment, and management; stakeholder engagement; and flexibility and adaptability to change. Of these six competencies, all but “ethics and integrity” are either new to performance management frameworks or are now defined in very different terms.

Following Hoffmann’s presentation, Semper confirmed that the six sustainability leadership competencies are embedded in GE’s leadership policies, models, and expectations. GE defined its approach to sustainability leadership by consulting global thought leaders as well as internal company leaders to understand their vision for leadership at the company.

Next, McDonald explained Unilever’s experience embedding sustainability into its business and among its leadership. Unilever’s first challenge was shifting consumer behavior. The second challenge was rolling out Unilever’s new business model that focused on living sustainably. The latter required a significant change management process to help employees understand and adapt to the new model. According to McDonald, this change process had three main levers:

  1. Engaging leadership—being aware of and understanding the issues is not enough; leaders need to be champions of the new model
  2. Embedding sustainability in all of the company’s processes and management systems
  3. Educating the investment community on the importance of embedded sustainability

Additionally, McDonald emphasized the importance of including human resources, since change requires a shift in the corporate culture.

Furthering the topic of supporting effective change leaders, all of the panelists emphasized the importance of immersing leaders in real-world experiences to help them understand societal perspectives. One panelist gave an example of a trip for leaders to visit local communities in Africa that the company’s operations impact. Putting leaders in these situations helps them improve their decision-making.

Herbst then explained his efforts to make Deutsche Bank climate neutral, and more specifically, how making this issue personal among staff helped the company achieve these goals. He stressed that leaders need to stand beside their staff and help them succeed as leaders themselves. This responsibility includes providing staff sustainability opportunities, measuring their performance and success, and recognizing their accomplishments. He also emphasized the benefits of letting your staff solve challenges. Lastly, Herbst mentioned that using an external advisory board helped tremendously.

To continue the conversation, McDonald explained his concept of “Leading for the ‘and.’” Essentially, it’s not enough to double the business—current leaders do this well. We need leaders who can double the business and reduce the company’s environmental impact and enhance its social impact. Unilever looks for leaders who have the attitude, behaviors, beliefs, and engagement to deliver on the “and.” When asked how to hold leaders accountable, Semper explained that at GE, how people reach their performance goals is just as important as the performance goals themselves. Sustainability competency expectations are integrated into the evaluation process.

Next, participants broke into groups and were asked to rate where their companies are and where they think they need to be in terms of the six leadership competencies. In general, none of the participants gave their companies high ratings for all six competencies, and very few of them discuss sustainability with their human resources departments regularly.

Participants also discussed some of the challenges and opportunities related to integrating these competencies into their companies. Some of the challenges include: middle management engagement on sustainability, the regulatory landscape, a clear definition of sustainability, leadership turnover, and stakeholder engagement competency. Some opportunities include attracting values-based talent, becoming market leaders, and working with human resources to put sustainability on the company agenda.



Thank You, Sponsors

Executive Sponsors

Cisco Hitachi PwC Target UL Responsible Sourcing

Associate Sponsors

Anheuser-Busch InBev

Supporting Sponsors

Adobe AT&T ExxonMobil Green Mountain Coffee Roasters, Inc.

Participating Sponsors

American Express Baker & McKenzie LLP Best Buy BNY Mellon Ford Hyatt Hotels Corporation The Walt Disney Company UPS Vale

Contributing Sponsors

Chevron icix Levi Strauss & Co.

Convening Media

Bloomberg Business Week Weber Shandwick

Marketing and Media

3BL Media BEF Caixin Media Corporate Knights Globescan GreenBiz Group Inc. Hemlock Responsible-Investor Sina Stanford Social Innovation Review (SSIR) Tomorrow Partners