The dynamic forces of ecological, social, and technological transformation are fundamentally changing the way businesses operate and succeed. Widening inequalities are destabilizing the communities and markets in which companies operate, and the consequences of environmental and social degradation are creating real operational challenges for businesses and affecting supply and demand patterns. The COVID-19 pandemic has only served to sharpen the urgent need to address these challenges.

The good news is that commercial leaders have never been more united in their belief that change is necessary, and that progress will only be achieved through the active participation of the private sector. With ninety-two percent of CEOs believing that integration of sustainability into their business strategies will be important to the future success of their business (according to Accenture Strategy's 2019 CEO Study on Sustainability), it appears that the case for change has been resoundingly made. The bad news is that significant barriers to change remain, with fewer than half of CEOs reporting that they have integrated a sustainability lens into their operations.

Every year we help place thousands of leaders into C-suite and board positions, and we know that what organizations value or require when they select new leaders has big consequences for organizational strategy and culture including what role the companies play in the world around them. We believe that the gap between what business leaders say they want to achieve when it comes to their sustainability agendas and what is being achieved is caused by the fact that sustainable leadership is rarely a selection requirement for senior leadership positions.

The rhetoric reality gap

Commitment to sustainability is at an all-time high and pressure to meaningfully integrate sustainability into strategy and operations is coming from all sides investors, employees, customers, regulators, and suppliers are all increasingly focused on the ethical practices of the companies with which they engage, and are all willing to take their business, labor or even license to operate elsewhere if needed. After years of being relegated to the margins as a niche area of interest, sustainable business practices and ‘stakeholder capitalism’ have emerged fully into the mainstream.

But a gap between the rhetoric of company commitments and the reality of company practices remains only forty-eight percent of CEOs say they are implementing sustainability in their operations, and only twenty-one percent of CEOs feel that business is playing a critical role in achieving the Sustainable Development Goals (SDGs).

What organizations value or require when they select new leaders (be they internal or external) has profound consequences for organizational strategy and culture. Despite changing stakeholder expectations of businesses and leaders, as of yet sustainability is not widely embedded in leadership expectations or culture what companies look for when they hire leaders is a good measure of this.

Commercial leaders have never been more united in their belief that change is necessary, and that progress will only be achieved through the active participation of the private sector

Russell Reynolds Associates looked at how frequently sustainability was a factor in senior executive hiring and board appointments. Analyzing close to 4,000 role specifications across industries and the globe, we found that in 2019 while 15 percent of executive and non-executive role specifications referred to sustainability (up from 9 percent in 2015) in only 4 percent of executive and non-executive role specifications were sustainability experience or mindset an actual requirement. To put that another way, businesses are doing a great job embedding talk of sustainability into descriptions about their company, but are falling short in driving decisions about which leaders to hire based on it (see figure 1).

While dedicated roles such as Chief Sustainability Officers are increasing in number, the scale of change required necessitates that senior leaders across the organization are bringing a sustainability lens to their decision-making, not just those with a dedicated remit. Without intentional effort to bring sustainability expertise into the C-suite, companies’ sustainability initiatives will remain stalled, no matter the authenticity of their commitments.

The model of the sustainable leader

To better understand what defines and differentiates sustainable leaders from other top-tier executives, we partnered with the United Nations Global Compact to study more than 50 CEOs and board directors with a track record of driving change by integrating sustainability into business strategy. The leaders we studied are without exception at the top of their organizations and industries – the bar for entry to these CEOs and board-level positions is a very high one. They share many of the attributes that define the most successful commercial leaders, but we found that these sustainable leaders were further distinguished by four key attributes, each of which is activated by a sustainable mindset that business needs to be both profitable and sustainable and that commercial activity is not divorced from the wider societal and environmental context in which it operates.

• Multi-level systems thinking: Sustainable leaders go beyond a deep understanding of their organizational system and incorporate the interplay with the larger economic, societal, and environmental systems around them. They drive targeted decisions and actions that turn sustainability into a competitive advantage.
•  Stakeholder inclusion: Sustainable leaders do not manage stakeholders, they include them. They proactively seek to understand and incorporate the points of view of all key stakeholders in order to drive decision-making and share the benefits.
• Disruptive innovation: Transformation may be easy to talk about, but it is tough to deliver. Sustainable leaders are willing to disrupt their business and industry – they ask why it cannot be done differently. They make bold investments that test the limits of what is possible and drive the innovation required to find novel solutions aimed at both profitability and sustainability.
• Long-term activation: Sustainable leaders do not simply have a long-term orientation; they set audacious goals and rigorously drive concerted action and investments in their pursuit of those goals. They stay the course in the face of setbacks and make decisions that may be unpopular with short-term-oriented stakeholders.

Underpinned by their sustainable mindset, these leadership attributes require high levels of courage, resilience, results orientation, curiosity, and empathy. This model of the sustainable leader provides a critical blueprint for organizations as they take up the imperative of identifying, selecting, and developing the sustainable leaders of tomorrow.

Developing sustainable leaders

We wanted to understand how it was that these pioneering CEOs and board members came to devote themselves to driving improved sustainability at the businesses they have led and worked in. These individuals can be categorized into three groups based on their motivations and journeys (see Figure 3):

• The Born Believers: Those who described a passion for the environment or social issues, having been fostered from an early age, often since childhood.
• The Convinced: Those who described an increased understanding of the strategic importance of sustainability as they grew in their careers and saw the interconnectivity between corporate decision-making and externalities such as the environment and social issues.
• The Awoken: Those that described a pivotal moment of realization, prompted by some major event or experience, that there was more to business than profit and that they personally had to do more.

It would be easy to assume that most sustainable leaders are Born Believers, and many of them are just under half. But even more have come to this topic over the course of their careers, either through slow realization or a uniquely formative experience. The varied motivations of the sustainable leaders in our study highlight two critical implications for businesses:

1. The pool of available leadership today that could drive forward the transformation we need is likely larger than it might first seem. While The Born Believers will be clearly visible, there are likely just as many of The Convinced out there.
2. Sustainable leadership can be fostered and developed you have the opportunity to shape and influence the careers of your leaders to help them understand the strategic importance of sustainability.

To foster the development of future sustainable leaders in your organization, learning and development programs must integrate a sustainable mindset and the four leadership capabilities as a core focus. It is in the long-term financial interest of companies to focus on taking several actions as it relates to leadership development:

• Identify opportunities to embed discussion about sustainability into the core leadership development program. This should not simply be added as a separate module, but rather woven throughout existing curricula on topics such as people management, strategy or innovation. Leaders must understand when and how to recognize sustainability risks and opportunities in every facet of the business, rather than as a separate topic to be considered in a vacuum.
• Ensure leadership development programs give leaders exposure to a range of stakeholders, especially those that are likely to have a substantially different worldview and life experience. In our study, we found that the sustainable leaders were three times more likely to have worked in two or more continents than a control group of CEOs from Global Fortune 500 companies that perform poorly on sustainability metrics. While it is hard to infer causality, it would be reasonable to assume that leaders with a track record of integrating sustainability into the business have benefited from their exposure to multiple cultures and a more well-rounded understanding of how business and society work. Indeed, many of the leaders we spoke to made precisely this point as they discussed their own experiences.
• Identify ‘crucible’ experiences usually leadership roles or responsibility for specific projects that will foster a sustainable mindset and help leaders hone the critical competencies of multi-level systems-thinking, stakeholder inclusion, disruptive innovation ad long-term activation. In our study, we found that sustainable leaders were more than twice as likely to have had significant experience in two or more functions than the control group (64 percent vs. 30 percent). As with international experience, the leaders we spoke to reported that this exposure furnished them with a broader perspective on their business and industry as well as helped them hone their leadership skills.

Fewer than half of CEOs report that they have actually integrated a sustainability lens into their operations

 The challenges of our current moment whether defined by the COVID-19 pandemic, the push for racial justice, or the creation of a more equitable economic system have made abundantly clear the need for a new type of business leadership, one that makes the long-term sustainability and resilience of our world a top priority.

 Identifying and developing this next generation of sustainable leaders will require a concerted effort on the part of boards and CEOs to embed sustainability into their leadership frameworks and processes, starting with what they look for and prioritize in new hires. This is not a matter of hiring a single individual to own sustainability. The systemic challenges the world faces today mean that sustainable leadership cannot be confined to a small minority; companies must instead cultivate sustainable leadership at all levels. This is not something that can wait. It is not a conversation for tomorrow, it is a conversation for today.