CEO’s wake-up call – changing business landscape heading to sustainability
Transformation is the order of the day in the business world. Take a nap and your competitor takes over from you! Most problems that companies are facing today are due to the people who are leading the organisations including the Chief Executive Officer, Managing Director or General Manager having limited knowledge of the emerging opportunities and threats of environmental and social sustainability. This is also coupled with Executive Team’s operating without ideas on how to rescue the company’s strategy when faced with international requirements for sustainability standards. Many business leaders have presided over the collapse of companies due to lack of fresh ideas to steer the company forward and not sure where the world’s developmental issues are headed to.
The rise of sustainability requirements for business has left many business leaders asleep in their wake especially on the international arena where many companies often wonder why their products do not end up in the shelves of other countries. These sleeping business giants need to be awakened to the realities of globalisation in order to help them to facilitate transformation and growth in sustainable development.
CEOs arise to embrace international standards
If you want your business to be taken seriously both at local and international level, the adoption of standards is imperative. Customers are increasing their demands and are pushing for companies to be sustainable in their processes. The Chief Executive Officer should lead the way in promoting good practices and eliminate sub-standard products. A wide range of international standards can be implemented including the following
- ISO 14001:2015 Environmental Management Systems
- ISO 45001:2018 Occupational Safety and Health Management Systems
- ISO 9001:2015 Quality Management Systems
- ISO 50001:2018 Energy Management
- ISO 26000 Social Responsibility
These standards have proven that they can assist companies to:
- Reduce resource intensity
- Save water
- Reduce chemical usage
- Reduce energy consumption
- Improve product quality
- Enhance stakeholder relationships
- Build trust
- Enhance competitiveness
- Prevent injuries and fatalities
CEOs have come to realise that it is suicidal for a business to operate without consideration of quality, safety, health and environmental considerations. With customers being spoilt for choice, it is therefore up to a given company to wake up from the slumber and join the international bandwagon of sustainable business enterprises.
Resisting international standards can be retrogressive to an organisation and can result in product boycotts as well as an increased cost on reworks. It is essential to note that the Global Survey of CEOs on Sustainability by McKinsey shows that 36% of the world’s leading firms and their CEOs have come to appreciate sustainability and have actually gone on to come up with specific programmes within their businesses.
CEOs aspire to be leading voices in sustainability
Traditionally environmental protection was mainly done by technocrats and specialists in the area without demystifying the concepts. Moreover, corporate leaders would stand in the terraces whilst the relevant Environmental Manager, Sustainability Manager or Safety, Health and Environmental (SHE) Officer runs the show. However, more CEOs are aspiring to be leaders in sustainability and making their voices heard on the issue.
Once the CEO takes a lead and also speaks to the significance of energy efficiency, water efficiency, occupational safety and health as well as sustainability disclosures you then see everyone in the organisation taking it seriously.
The Former CEO of Unilever Paul Polman and the CEO of Olam International Sunny Varghese have taken active leadership in sustainability. Both have been Chairs of the World Business Council for Sustainable Development (WBCSD) – a leading private sector organisation anchored on sustainability. Their work and ambassadorial role on the principles of sustainability of companies have been a marvel to watch. The Unilever Sustainable Living Plan remains one of the best in the world in terms of promoting business sustainability. This has also endeared the companies well with the customers in order to increase uptake of products and services.
CEO’s nightmare – waking up to stakeholder complaints in public
Stakeholders are important to the success of a business. They come in different forms such as the customers, shareholders, employees, regulators, suppliers and other key stakeholder groups. In order to achieve social sustainability, companies must not ignore stakeholder concerns, suggestions and public issues as these may have a material effect on the image of the company. It is the CEO’s role to ensure that business is proactive rather than reactive and that the business engages stakeholders with sincerity.
It is necessary that companies fully consider Corporate Social Responsibility (CSR) as part of their business strategy. However, some companies believe that CSR is philanthropy, whilst this is not the case. True CSR goes beyond just dishing out gifts in the community and it requires a holistic approach to stakeholder engagement including facilitating sustainable solutions to stakeholder needs.
It may be useful to formulate a Stakeholder Engagement Plan or a CSR Strategy. Once a company manages this issue, it can prevent the risk of being involved in damning stakeholder conflicts and public humiliation.
The CEO should always be reminded that the image of company takes many years to build such that any dent in the reputation can have far reaching effects including reduction of the value of the company’s share prices, product boycotts and resentment on the market.
CEOs opportunity – Wake up to access green financing options
Due to the green industrial revolution and the world’s fast track commitment to deal with environmental challenges; a lot of money has been thrown onto the fray. Companies that wake up early to implement sustainability projects in their operations can get this financing at concessionary terms, favourable interest rates or no cost.
Do you know that it is possible to finance a factory or plant upgrade using climate finance? Do you know that you can set up a solar energy project at your company supported by international developmental finance such as the Green Climate Fund? Do you know that you can get finance by offsetting your greenhouse gas emissions?
These opportunities are seized by those business leaders who are able to see beyond the present and wake up from their dreams earlier than others. Business can no longer operate in the old ways of archaic production technologies. In addition the days where sub-standard products are pumped on the market in large quantities are gone as customers are demanding more and more each day. The CEO who takes the sustainable path early, guarantees success of his or her own business for many years to come.
