Stephenie Dickert
Stephenie Cadieux (nee Dickert) holds a Bachelor of Administrative and Commercial Studies from Western University in London, ON, and is currently a part-time postgraduate student in the MAIS program. She is an Officer in the Canadian Armed Forces and has served in Comox, B.C., Winnipeg, MB, Ottawa, ON, and most recently in Belgium as a Staff Officer to the Canadian National Military Representative to NATO. Her research interests include organizational leadership, wartime sexual violence, peace building, and gender issues.
The following paper examines the impact of the sustainability movement on leadership in the public, private and non-profit sectors; specifically by exploring the various challenges and opportunities that leaders in all three sectors face in navigating this relatively new phenomenon. Numerous definitions and critiques of sustainability will suggest that it is a complex problem currently lacking consensus on best practices, methodologies in application and desired result. While sustainability presents challenges that require adapted leadership competencies, there are also abundant opportunities for value-creation and innovation. This paper suggests that leaders may leverage the global phenomenon of a move towards sustainability to create value for their organizations within the aforementioned sectors of society.
Keywords: Leadership, Leadership Competencies, Sustainability, Innovation, Environment, Organizational Culture
The sustainability agenda is a relatively new phenomenon in our current capitalist economy. The negative environmental impact of human development documented in Rachel Carson’s Silent Spring (1962) is widely recognized as having initiated the modern environmental movement and inspired advocacy for the conservation of natural resources. In its fledgling state, the concept of sustainability was formalized on a global platform when the 1987 Brundtland Commission of the United Nations was created to consider how to best balance economic and social development with the preservation of natural eco-systems. The Brundtland Commission is “generally credited with introducing [the term] ‘sustainability’ in their report” (Crews, 2010). ‘Sustainability’ has been defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs” (WECD, 1987). The unfortunate current reality is that the economy, environment and human society, though interdependent, have generally been viewed in isolation; each seen as contradictory in values and goals to the other. However, efforts towards sustainability are reliant “on the integration of three separate communities: those primarily interested in profits, the planet, or people” respectively (Crews, 2010), and there must be a focus on true collaboration rather than superficial cooperation or token participation.
Sustainability “seems to have become the buzzword of our time […] implicated at every possible occasion” (Ben-Eli, 2018). Multiple definitions and competing interpretations have made it hard to focus on an end-state, or even to agree on sustainability as a normative goal—particularly as it applies to economic activities and human development. Moreover, multiple interpretations and competing priorities “could potentially result in unintentionally lower commitments” (Hooey et al., 2017), thereby undermining the sustainability agenda. There is hope, however, in the very “use of the term, [which] impl[ies] the sense of a desired continuity” (Ben-Eli, 2018). Further, there is a general consensus that current global economic activities are not sustainable with our planet’s finite resources. Destructive and wasteful practices are decreasingly tolerated, and the desire for transparency and accountability in all sectors is heightened in this era of interconnectedness and technological advancements in communications and social networking. Indeed, there is global movement away from singular concern for economic growth at all costs, towards finding “the triple bottom line”—a concept introduced by entrepreneur and business author John Elkington in 1994 to reflect a multi-focus on people, planets, and profits.
Sustainability initiatives have affected not only the corporate (private) sector but also public and non-for-profit sectors. All sectors must contend with this “amorphous phenomenon” (Christensen et al., 2017) in order to maintain both societal legitimacy and create value and must recognize that sustainability is “not as a clear or consistent agenda, but rather as a forum for sense making, diversity of opinion, and debate over the social norms and expectations attached to corporate activity” (as cited in Christensen et al., 2017). Leaders in all sectors are challenged to consider the sustainability agenda and its impact in their operations; not only in the interest of addressing the negative ecological impact of human activities, but also to build resiliency in times of scarcity, leverage business opportunities, improve and strengthen the communities in which they operate, and build credibility. This challenge has created a model of sustainability leadership, which can be defined as “the process of promoting an array of concrete environmental, economic, and social practices, over time, by a broad array of actors […] who ultimately have a variety of mutually supporting beneficial outcomes in communities” (Wang et al., 2014). Leaders have an important role to play in the integration of sustainable activities and the development of a sustainability mindset, and, ultimately, in advocating for sustainability as a source of value creation. Indeed, people in positions of influence who focus their efforts on sustainability “may directly improve implementation of practices and indirectly foster positive sustainability results” (ibid).
This paper explores some of the challenges that leaders in the private, public, and non-profit sectors face in navigating sustainability. A preliminary analysis on the numerous definitions and critiques of sustainability will suggest that it is a complex problem space currently lacking consensus on best practice, methodologies in application and even a desired end-state. Secondly, the challenges faced by leaders while advancing the sustainability agenda within their organizations, and what leadership competencies are prescribed to mitigate these challenges, will be discussed. Lastly, sustainability presents opportunities for value-creation and innovation which are in line with sustainability leadership: this paper will conclude by exploring how leaders may leverage this global phenomenon to create value for themselves and others.
The term sustainability often recalls environmental preservation, an ecological perspective that prioritizes conservation and responsible stewardship of the natural environment. While this perspective does not necessarily incorporate, or sympathize with, a whole picture of human life and development on the planet—economic activity in particular—increasingly, the economic and social dimensions of sustainability are included in discussion of sustainability. Economic and social dimensions present sustainability “in a context that is exceedingly complex, constituting a dynamic, multivariable universe involving multiple social, political, economic, and cultural aspects interacting among themselves, across sectors, and with the physical and non-human living parts of the world” (Ben-Eli, 2018).
But what exactly do we mean when we talk about sustainability? From an environmental perspective, one may focus on the balance between the carrying capacity of the earth and its ability to support human life. From a social perspective, attention is often focused on the equality of human development, the eradication of poverty and equal access to resources and opportunities for all people. From an economic perspective, sustainability regularly refers to economic practices that support growth and profit indefinitely. All definitions of sustainability “tend to have three elements in common […] : (1) living within the world’s natural limits; (2) understanding the interconnectedness among economy, society, and environment; and (3) equitable distribution of resources and opportunities” (Jones & Mucha, 2014). The attempts to integrate these perspectives, envisioning a sustainability ‘sweet spot’ where the three overlap, “results in a balancing act, in which the emphasis is on trade-offs among the three communities” (Crews, 2010). There is, however, a critique to this concept of negotiating trade-offs: it may not incentivize sectoral collaboration, because it may be perceived as a ‘lose-lose’ situation. When values, organizational goals and conceptual definitions contradict, it is often difficult to agree.
The United Nations Commission on Environment and Development does not help with its vague definition of sustainable development as taking care of current needs without jeopardizing the needs of future generations. Given the lack of a cohesive definition, the concept of sustainability is itself open to interpretation and “does not offer any clear operational guidelines” nor “establish utility values for future generations” (Ben-Eli, 2018). There is a void of policy guidance to effect change. Additionally, the Brundtland Commission has been faulted for focusing too heavily on continued economic development, as their report presented the idea that sustainability is simply a business-minded approach that presents new opportunities for economic growth and overly relied on hopes the capitalist market economy will ‘fix’ this ecological problem. Indeed, “part of the challenge that the sustainability movement has faced up to this point is that it has isolated economics as deserving special recognition and attention in sustainability decisions” (Smythe, 2014). Despite such criticism, the Commission’s report “brought warranted attention to the challenges inherent in halting environmental degradation” (ibid), and propelled the sustainability agenda to the forefront of economic concerns today.
At present, the overwhelming consensus is that the current economic activity is not ecologically sustainable. Climate change, persistent poverty, scare resources, uneven human development, social inequality and environmental degradation all demand serious reconsideration of how humans interact with, and in, our environment, and contend that dedicated action is required. Sustainability requires a balanced, immediate and integrative approach that demonstrates both the urgency for change and the realization of “sustainability as a system state” (Ben-Eli, 2018) as opposed to a normative goal.
Despite sectoral differences in definition and prioritization of sustainability initiatives, “sustainability is gaining strategic weight and is increasingly understood as a driver of innovation, technology development and new business models” (United Nations Global Compact, 2015). There is pressure and scrutiny at all levels, for the public, private, and non-profit sectors to act responsibly and responsively to the sustainability crisis. Leaders within organizations “are increasingly expected to adopt sustainability standards as shared, authoritative and recognized reference points at both local and global levels of operation” (as cited in Christensen et al, 2017). The problem is that without a clear and encompassing definition of sustainability, any attempts at mitigation strategies, processes, measurement or standards may be met with ambivalence or inconsistencies at best, and outright criticism and resistance at worst. Generally, critics consider implemented sustainability strategies to be either ineffectual or too severe. In response to this difficulty, some international bodies have introduced “sustainability standards such as the UN Global Compact and SA8000 […] to stimulate, guide, and help organizations account for socially and environmentally desirable behavior and to support different constituencies in governing organizations at a distance” (ibid). The Global Impact, for example, was developed to assist worldwide businesses implement sustainable and socially responsible policies aligned with UN goals and to report on the result. The benefit of such initiatives is that they deliver an industry standard on vague, but critically important, issues and allow stakeholders to monitor the performance and impact that organizations have in response to adopting policies on sustainability.
Sustainability standards and voluntary regulation are often criticized as being too open-ended “precisely because of its ambiguous nature; [sustainability] allows for sense-making and participation from many different stakeholders with diverse interests and expectations” (ibid). Corporate sustainability strategy may focus on the ‘low hanging fruit’ of sustainability practices, as a sort of corporate greenwashing, without actually focusing on “what sustainability means or could mean for organizations and society” (ibid). Such practices prevent critical thought and an incorporation of sustainability values into organizational culture. This approach closes off any discussion or reflection as actions are directed towards meeting standards set in the past, without considering the future. The Global Compact acknowledges that for fundamental change to occur, “it is not just corporate practices and operating environments that need to change […], a change in the worldviews which ultimately guide behavior is [also] essential” (UN Global Compact, 2015). This acknowledgment points out that more than just cursory participation is necessary, a commitment to sustainability as a core value is essential.
While organizations are navigating the complexities of sustainability, competing priorities, and ambiguous standards, they often lack performance measurement benchmarks due to the inability to define a desired end-state. Political bodies and international organizations have used criteria such as greenhouse gas emissions, production byproducts, environmental degradation, employment generation, community living conditions, trade balance, etc., yet have generally operated without identifiable or measurable controls for success, and some factors and issues are easier to assess than others. For example, environmental health is generally “easier to measure, while social issues are often more difficult to monitor and assess” (Hooey et al., 2017). A clear definition would allow for “measurable components that can offer actionable guidelines” (Ben-Eli, 2018). Unfortunately, the current economic environment has become accustomed to measuring success by product development, financial gain and continuous growth. Leaders in industry, and, arguably, in all sectors, are confronted with alternative methods of determining success, such as the Triple Bottom Line, which requires a profound adjustment in perspective. Given the tendency for the media circulation of misinformation in matters of sustainability, such a shift in perspective can be met with skepticism: “often the result of opinions simply filling the void left by the lack of accessible and easy-to-understand science-based information” (Roach & Worbets, 2012). In fact, given the misinformation and intellectual and moral fatigue surrounding ‘sustainability’ as the buzzword of our time, “some people see sustainable development, or sustainability, as an unrealistic goal which can never be achieved” (Hooey et al., 2017), and its pursuit a course of action that will negatively impact quality of human life and capitalist economy as we know it.
Nonetheless, it is indisputable that our current practices are unsustainable. This means that any effort towards environmental, social and economic sustainability (no matter how imperfect) are advances. What is needed is a fundamental “reframing [of] sustainability on the basis of holistic human welfare, both in relation to the natural and social worlds [that] is likely to bring societies closer to sustainability” (Smythe, 2014). Therefore, “the leadership challenge with regard to sustainability is to think of mutually supporting gains” (Crews, 2010). The persistent dispute is how to bridge the gap between corporate (economic) and environmental agendas considering that organizational leaders will continue to have competing viewpoints on the meaning of sustainability.
The sustainability crisis is unavoidable; legacy practices and the current economic focus on unfettered growth are simply not sustainable any longer. What does this mean for leaders in the corporate, public, and non-profit sectors? Business activities in all sectors vary considerably in mission, goals, culture, and values; however, the sustainability agenda affects everyone given that the natural environment does not respect national boundaries and globalization has resulted in an increasingly interconnected world. Leadership for sustainability focuses on the “need to transcend organizationally-bound mindsets” (Mau, 2015), to make a business case for sustainability and to communicate the overall value of sustainability practices for organizations and their stakeholders. Sustainability leadership is a growing field of research in a world where the role of leaders is linked to the capacity for transformational change. Beyond providing visionary guidance, organizational leadership at all levels “help craft the specific practices and supporting systems, which can be complex and may need extensive fine-tuning; they help overcome internal organizational resistance to change; and they work with the community in evolving educative, facilitative, and regulatory ways to enhance policy effectiveness” (as cited in Wang et al., 2014). Leadership can influence change by communicating values, introducing policy that supports sustainable business, promoting and fostering innovation, encouraging dialogue (thereby facilitating buy-in from all stakeholders) and, most importantly, by demonstrating commitment to the policies and practices that have been adopted. Sustainability is a lofty goal, especially if the sector in question is unaccustomed to such practices designed to incorporate sustainability. Indeed, sustainability leadership can be compared to social change leadership, in that it must aspire to create meaningful, collaborative change that is values based. “Leaders must shift their focus from success to significance” (Kraemer, 2011) with an application of values-based competencies to facilitate change.
Values-based leadership motivates through shared values to create a culture of accountability and commitment. It focuses on positive and impactful change. Incorporating the sustainability agenda into an organization often requires the adoption of sustainability as a core value, and a corresponding change in organizational culture: “values define the culture of the organization, setting the tone for every interaction” (ibid). Leaders can demonstrate this value is by communicating that sustainability is a source of value creation, not just for the singular business or organization, but for the wider community in which it operates. This way, sustainability is approached as a mutually supportive gain. Additionally, sustainability can be presented as a necessary and legitimate constraint similar to fiscal pressures, competing priorities, and organizational framework; an ever-present operating control that must be considered at all levels of decision making. In designing a change in approach, leaders aspire to create a “culture of sustainability […] in which organizational members hold shared assumptions and beliefs about the importance of balancing economic efficiency, social equity and environmental accountability” (as cited in Hooey et al., 2017). A culture of sustainability requires a change of mindset in society and the workforce from a “compliance mentality” to that of a “value driven” mentality (Hohnen & Potts, 2007), and this must be modelled and endorsed by the echelons of leadership.
The public, private and non-profit sectors have traditionally embraced different styles of leadership based on their goals, organizational culture and structure, operating environment and leadership development. Leadership in the private sector tends to reflect a mission of profitability, growth, and shareholder value. Leadership in the public sector varies from focusing on long-term strategy for creating public value to supporting profit-oriented enterprises with fiscal-calendar goals. The non-profit sector is perhaps best aligned with a sustainability perspective, in that the ‘raison-d’être’ is often to address complex social, environmental or public issues and advocate for social change. However, no sector is excluded from the impact of the sustainability crisis. The trend towards values-based leadership is not only in response to adopting sustainability in practice but has increasingly become the leadership style of choice in an era of increased transparency, accountability, flexibility, diversity, and advocacy. Well-timed as it is, sectoral differences in specific sustainability concerns may guide leadership strategies in different ways in order to promote a culture of sustainability.
Numerous strategies are presented in research on corporate greening and setting the conditions for sustainable practices in business. The prevailing opinion is that leadership must make a case for sustainability and commit to its implementation; it must be made measurable, able to control processes, and act as a standard of performance evaluation. Adaptation needs to occur at the levels of leadership, in order to “give confidence about sustainable development as a long-term strategy for the company” (Baumgartner, 2009). The role of leaders is essential, not only to direct and monitor transformational change, but also to model and demonstrate expectations through behavior. It has been shown that “the successful implementation of environmental practices (i.e. the implementation of a sustainability policy, pollution prevention actions, promotion of industrial ecology, training programs, etc.) presupposes an active commitment from top managers” (Boiral et al., 2012). Leadership must be action-oriented and work to influence change in its own embodiment of purported values.
Beyond instituting a culture of sustainability and commitment to action, values-based leadership presupposes certain competencies that promote sustainability. Competencies “are a critical lever to produce a leadership brand within an organization” (Mau, 2015), and work towards creating affiliation and buy-in. Firstly, a global mindset is a necessary requirement for any leader who is considering a global phenomenon. Sustainability, at its core, is a concept that promotes the welfare of all humanity as well as the planet. Impacts of human activity are felt globally, and therefore require a planetary mindset. With that mindset comes respect for diversity, sensitivity to regional differences, cultural understanding and a genuine concern for the conditions that affect others. It is a mindset well-described in the phrase ‘think global, act local.’ A global mindset legitimizes business practices that create “meaningful work and meaningful lives for those human beings who make up the economy” (as cited in Smythe, 2014), instead of only working for the financial wellbeing of shareholders focused on economic growth.
Values-based leadership also encourages collaborative efforts and cross-cultural cooperation in a commitment to shared values. When sustainability issues span various groups, leaders need to be committed to equality and they must be adept in respectful communication, negotiation and capacity to influence. When ethics and values play a central role in managing diverse viewpoints, leaders can support mutually beneficial outcomes, instead of simply negotiating trade-offs. Skillful communication in facilitating ongoing dialogues regarding the sustainability agenda is essential in order to assess and critique the process of “adopting, fine-tuning, and developing sustainability standards to fit changing social and environmental problems” (Christensen et al., 2017). Given that many existing sustainability programs rely on voluntary reporting and arbitrary standards, leaders need to ensure that discussion on the subject is not closed off; new information may arise that points to better reporting, new efficiencies, more effective standards or new initiatives that warrant exploration. In fact, “closure transfers responsibility from the organization to the standard itself […], which means that organizations will have a tendency to focus on fulfilling goals of earlier relevance rather than facing up to new and future situations” (ibid). A compensating leadership competency is to drive innovation in sustainable policy, practices, processes and performance. The phenomenon of the sustainability crisis, in all its variations and instances, is undergoing continuous evaluation and requires innovative thought and action: “sustainability is a complex and constantly moving target and recognition of its potentials and intricacies depends on its actual use in different situations, organizations, and industries” (ibid). A leader must ask themselves: What does sustainability mean to me? What can sustainability do for me and my organization? How can I help the sustainability agenda? Inviting communication and critique of existing practices facilitates learning which inspires ideas and, ultimately, action.
Competencies aside, when the ‘rubber meets the road’—as the colloquialism goes—a business must be prepared to adopt sustainability practices or risk becoming obsolescent. It has been proven that “sustainability is more than a fad, but rather is creating a permanent shift in the very nature of business” (Crews, 2010). Private, public, and non-profit sectors will all be compelled to acknowledge and incorporate the necessity of sustainability in their practices.
While there are already standards and reporting mechanisms in place, the voluntary nature of participation has not resulted in equal outcomes. Interestingly, non-profit organizations “have been slow to adopt the practices of sustainability assessment and reporting for a variety of reasons, including the perception that assessment is necessarily expensive and time-consuming, and that increased accountability is not needed in a sector that works, by definition, ‘for the public good’” (Jones & Mucha, 2013). While this perception does not excuse their inaction, it may also point to a misunderstanding of what it means to account for the social, environmental, and economic impacts of business activities. In the concept of the Triple Bottom Line, it means to evaluate each impact/activity; instead of accounting for financial viability and success, this concept takes into consideration the social, environmental and economic impact of business in evaluating performance, thereby broadening the perspective of what constitutes success. The challenge in application is measurement, specifically as it applies to the qualitative measurement of environmental and social impact. Prevailing research on effective sustainability reporting has indicated that there are five elements to consider when designing an effective system: “(1) presentation of a preferred definition of sustainability; (2) the use of performance indicators to describe relevant constructs for measurement; (3) the use of multiple units of measurement; (4) an interdisciplinary approach to assessment; and (5) the use of traditional accounting principles and practices” (Jones & Mucha, 2013). These elements have been addressed in the creation of international standards, such as Social Accountability 8000, the Forest Stewardship Council, the Global Reporting Initiative or the Dow Jones Sustainability Index. Such standards can assist organizational leaders in navigating the complexity of this issue, but there is still the risk that conforming to them “may be ceremonial, rather than substantial” (as cited in Christensen et al., 2017).
In contrast to these corporatized standardizations and their accompanying certifications there exists principle-based sustainability standards such as the UN Global Compact, which is “designed to guide organizational behavior rather than manage or measure it” (Christensen et al., 2017). This mode of accountability motivates creative action and allows organizations to identify sustainability solutions that correspond with their values. It leaves the discussion of sustainability open, which can be an advantage to organizations that encourage innovation. It “invite[s] organizational members to mobilize and develop their knowledge and to bring it forward to benefit the organization and, eventually, the wider society” (ibid). Whatever the methodology, organizational leaders need to design a three-pillared system of accountability that includes continuous assessment of “whether the behavior induced by the system is the one called for by the strategy” (Crews, 2010). Organizations need to remain responsive to public pressure and global demands for responsibility with regards to stewardship of the natural environment, human capital, and economic resources. Furthermore, accountability and transparency in all activities should be enforced by a respected body, in order to secure public trust.
In 2007, the International Institute for Sustainable Development published Corporate Social Responsibility: An Implementation Guide for Business, which outlines the key benefits of implementing a CSR strategy. These types of resource demonstrates the benefit that an organizational re-focus from singular purpose (e.g., profit), to a multi-dimensional purpose (e.g., Triple Bottom Line) can also be successful and create value for the public. Some key benefits include:
CSR initiatives can assist in developing and sustaining a workforce that is working to achieve something bigger than themselves, which is aligned with value-based leadership as discussed earlier. When there is a “shift [in] focus from success to significance” (Kraemer, 2011), people aspire to work harder and better. Secondly, organizations that have incorporated sustainability as a core value may more quickly identify opportunities, whereas in the past they would not have had ideational capacity. Lastly, an emphasis on CSR practices creates confidence that an organization can collaborate with stakeholders to create mutually beneficial outcomes and encourage positive change as a leader in their field.
Some other ways that organizations may leverage the benefits of CSR in practice is through their standardization and reporting mechanisms. For example, “sustainability assessments can uncover inefficiencies, inequities, and waste in organizational operations, offering opportunities to make changes that may reduce costs, improve employee satisfaction, and improve services to clients and the community” (Jones & Mucha, 2014). In addition, further inspection may highlight best practices that may have gone unnoticed and thereby identify how things have been done well and can continue. Keeping records of such assessments and reports can provide benchmarks for performance, revealing what has been done right, what needs improvement and the challenges. Knowledge of the numerous benefits that accompany sustainability results in “increased levels of understanding of the link between responsible business and good business” (Hohnen & Potts, 2007) and the recognition that former does not come at the expense of the latter.
The importance of working towards economic, environmental and social sustainability in our present day cannot be understated. There is arguably enough data to prove that the current rates of economic production, environmental degradation, social inequality and human activity are not sustainable. It is not just a problem in the ‘Global North.’ “While the need for sustainability has been most keenly felt in postindustrial societies such as Europe and North America, it is rapidly becoming a key concern in the newly industrialized and developing world” (Wang et al., 2014). Economic and social issues transcend national and political boundaries, and economic impact is increasingly felt on a global scale because of globalization. The challenges that sustainability presents to leaders in all sectors of society can be linked to the inability to define sustainability in a way that formulates a unified approach or describes a specific end-state. To combat this challenge, numerous standards of certification, measurement and reporting have been created to assist organizations to implement sustainable action and align with the sustainability agenda. New models for performance success are introduced with the concept of the ‘Triple Bottom Line,’ meaning that due regard must be paid to the economic, environmental and social implications of business, and that success can be achieved when all three aspects are addressed.
The traditional styles of leadership in each sector have also been challenged as the multi-dimensional focus that sustainability requires—along with the integration of sustainability as a core organizational value—require a transition to values-based leadership. Value-based leadership is best suited for incorporating organizational sustainability with its focus on motivation through shared values, collaboration, effective communication, sensitivity to diversity and transformational change. These are all leadership competencies that, if adopted, could lead to the development of strategic operational advantages to organizations that are navigating the transition to sustainable practices. In the pursuit of such, there are also many opportunities that can be leveraged by incorporating sustainability as a core value and business-driver. Not only does it speak to the ethics and integrity of an organization in its consideration of the welfare of all stakeholders, business or otherwise, but there are “mutually supporting beneficial outcomes in communities” (ibid) themselves that can be capitalized. Creating public value means more than just economic growth and profitability as our capitalist economy would suggest. Public value has been, and will continue to be, understood as the value an organization can bring to the society it serves. The fundamental role of leaders in the sustainability crisis is to shift to value-based leadership: the creation of shared values among stakeholders, respect for the diversity in opinion that will result, integrity to act for the mutual supporting gains of all and commitment to the cause for the betterment of humankind and the planet.