| Facilitator
Robert England, Executive Practice Leader, Executive Search Team, en world Group
| Panelists
Gavin Dixon, Co-founder & Director, Global Perspectives
Tove Kinooka, Co-founder & Director, Global Perspectives
| Summary
“Sustainability”is the challenge that organizations are increasingly under pressure to address. Here, our panel considers the people factor, which is critical to realization of successful sustainability efforts, from strategy-setting through effective, ongoing implementation.
Imminent mandates, regulatory pressures
Companies are coming to recognize that sustainability needs to be front-and-center, embedded into everything that they do. That is proving very challenging for many organizations. Meanwhile, some Japanese companies are coming under pressure from their European operations to really push forward on the sustainability agenda because they are getting pressured in turn by both regulatory authorities and consumers, particularly with regard to environmental sustainability.
For example, any company that is operating in Europe or based in that region is going to be very aware of imminent mandating of due diligence on human rights and environmental issues. Things are moving fast and that is putting a lot of pressure on companies to shift from doing it at the sidelines to bringing it into the center of what they do.
What? How? Who?
Whereas many sustainability departments were hitherto almost external to normal business operations, now, we are seeing them being incorporated into every line of business. But one of the big challenges is having the right people in the right place, with the right skillsets and mindsets. In Hence, the urgent questions have become “What should we do?", “How should we do it?” and “Who should we do it with?”
Several companies have developed big strategies with extensive ideas and senior leaderships have bought in and supported this. The challenge, however, occurs when it comes to implementing these strategies. What a lot of companies are finding is there's a lack of awareness or engagement, as you move further down the organization. This is the level where people can influence getting the strategies implemented.
Organization-wide integration of sustainability commitment
To do this, a clear understanding of what those plans and strategies are, and then developing the people execute them. Looking at company websites, now, nearly every one of them has a sustainability section which is noticeably clear. Some of them are very well done but a lot of it is being driven from overseas. If the organization is in Europe or the U.S., its sustainability program is likely to be quite advanced.
Meanwhile, companies in Japan are trying to “Japanify” the process and make the sustainability programs fit for operations in Japan. Now, we are seeing them starting to bring on people or have individuals become more responsible for those particular roles.
Many companies now recognize the importance of management “buy-in” and designated senior-level roles in implementing sustainability programs.
There is not only an increase in the number of roles in sustainability from bottom to top; more importantly, there is an increased level of seniority of those positions. We have yet to see the dominance of a CSO, a Corporate Sustainability Officer in every company and, of course, some small companies could not justify having such a specialized role.
Nissan has a CSO. It is a big company and one would expect all big companies to have a CSO either designated or as a part of an executive’s overall duties.
What qualifications are required?
It is important to understand what “qualified” means and how that fits into what sort of skill set is needed. Then, what are the necessary qualifications, whether that be experience, documentation, or a combination of both?
On the experience front, a major skill set is project management. With any project management background, if a person has the level of seniority to be able to deal with senior leadership, there should be a lot more buy-in than one might expect, but the question remains:” How is this really benefiting me?”
If you have somebody at a senior level who can break down those barriers and drive the message home, it's a lot easier than relying on some very energetic, junior person with all the passion who has not been in the company long enough.
When you have a director-level person being hired to run a sustainability program, that shows the intent of that company. Then, can they grow the people under them by training them up?
Transferable capabilities
You do not necessarily look for a sustainability qualification; rather, transferable skills across different organizations, departments and sectors.
If you start developing the whole organization and everyone within it, giving them the skills, instilling the mindsets and behaviors, it is amazing what happens. If you give the people within your organization the opportunities, some space to develop, and the necessary tools, you will find that many are happy to do it themselves and qualify to have “Sustainability Expert” on their business cards.
You must have somebody at the top with at least enough influence and experience within the organization to make things happen. That is crucial.
The drivers of sustainability programs have to be at the executive level or able to have influence at that level. In fact, they do not need to have all the sustainability knowledge themselves, as long as you have those key people in place whom you can build a team of experts. Obviously, there will be some people at distinct levels who come in, have the passion, do not yet have the knowledge or experience but can work on developing those attributes.
You can then bring in a team and say, “Right, we need somebody who really understands ESG reporting, let's go and look for an expert in that” and they take the lead on that aspect.“We really need somebody who understands human rights, and everything related to that; bring someone in for that role.”
To date, many companies have been primarily engaged on the processes and getting the frameworks set up without thinking about who is going to use these frameworks to deliver the strategies; in a sense, focusing on the hardware rather than the software.
Develop “human software” to run “strategy hardware”
Because there is presently a shortage of identifiable, recognizable talent in the marketplace it is becoming beholden on companies to take a leap and develop people internally, give them space, and be creative about developing that “software” to run the “hardware.”
Today, there is a greater degree of opportunity to study environmental and sustainability management.
Sustainability across all functions
Often, people see sustainability as a separate thing. It is difficult to understand how it directly connects into different functions, and separate roles within the organization. But an organization should not be distinct functions working independently; they should all be pulling in the same direction and talking to each other, connecting every individual's daily work process and habits through sustainability.
It really does not take much to shift individuals’ mindsets so that they can connect their own personal benefit as well as the benefit to the company and potentially to society, and they can see their place within the sustainability framework of the company.
We are seeing a growing awareness of and exposure to sustainability and ESG which is resulting in a trend to greater seniority status for jobs related to sustainability activities.
Younger employees have greater passion for and a bigger stake in the benefits of sustainability. Let’s give them more opportunities.
There is now a tendency to give more people opportunities, particularly in respect of the Gen-Z group, the under 25s. They are the ones that are more passionate about sustainability issues and a desire to make sure that things do go well, because they are going to be left with the effects of everything in the future.
There is an influx of passionate, qualified people who have limited experience. But we are also seeing a lot of pivots happening at career stages, senior people utilizing their skills in different ways and leveraging their seniority in the organization to enable these projects to get up and run and drive the campaigns.
Growing awareness
We are also seeing a surge in sustainability website documents and an increase in new products which have grown new markets.
The One Young World program, which brings together senior business leaders, politicians, activists, and young leaders from around the world, is coming to Japan in May 2022. It should provide an opportunity for a lot of organizations to really support their younger leaders. But the support for that needs to come from the top of the organization.
Senior leadership seems to be starting to understand that they do not have all the answers and they must look throughout the organization. all the way down to the younger generation, and to support them and give them responsibility.
Pandemic lesson: Entrusting responsibility
The Covid pandemic experience has shown that it is possible to give your team members responsibility. They can be trusted to work from home and even be more productive in many cases. The same can apply to sustainability projects.
However, this way of thinking is a major challenge for some of the big Japanese companies that are based on the meritocracy, ageist paradigm.
Young female potential
Thinking about the type of candidates that are not only interested in sustainability jobs but are open to altering their career paths, they tend to be exceptionally talented, at least bilingual, very gifted young females who are demonstrating energy and enthusiasm and will, given the opportunities, take on and lead sustainability projects.
Formerly ESG(Environmental, Social, and Governance) was seen as an external obligation that was about reporting. But now, ESG management is really an extended process that affects every part of a business and reporting is only part of it. Out of that reporting must come action. This is where companies are starting to find it difficult because they might have ESG reporting specialists, but they do not have anyone in the organization that is aware of or has the skills and knowledge to be able to implement what comes out of ESG reporting.
ESG management – beyond reporting
Companies need to look at ESG management as a long-term process and to think about finding the people within the organizations that can link the reporting to verifiable KPIs and return on investment, about business outcomes from the ESG component
It is easy if you are looking at a physical product to map out the lifecycle of that product and think about how it is impacting people and the planet before it even reaches the consumer, and beyond its useful life. That is harder with service industries. But it is also important to think about not just the product or the service that you are selling but also how it is impacting people and society.
Conclusion
In order to move beyond ESG reporting and strategizing into effective implementation of sustainability programs, companies should, first, ensure that there is top-level commitment and senior leadership buy-in. Then, look to the untapped human potential within their organizations to pursue solutions. Once those human resources are identified, give people the responsibility, the space, and the tools to generate ideas.
