As the dust settles following the COP26 climate summit, it is crucial that the global community press ahead with implementing solutions in support of net-zero emissions future.
Strong and decisive leadership is more important than ever before – not just from governments but also from the private sector. An important study released last month by UN Global Compact and Accenture – Climate Leadership in the Eleventh Hour.
It shared the perspectives of 1,200 CEOs on how they perceived their role in climate action. 72% believe sustainability is priority as they deal with COVID-19, with 4 in 5 agreeing that the pandemic has highlighted the need to transition to more sustainable business models.
Encouragingly, 57% are prioritizing climate action as a result, yet only 18% say policymakers have given them the clarity needed to align their actions with the 1.5 degrees pathway.
What this underlines is that, even when government policy on climate change and net-zero fall short, there is an obligation, both moral and financial, for business leaders to act.
In November, GRI held the third part of expert series on sustainable business leadership, with a session titled Leading from the top: the indispensable role of CEOs in sustainability.
Bringing together a cohort of top CEOs from the Southeast Asia region, it shared ideas on how to implement strategies that achieve the ‘triple bottom line’ of environmental, social and financial performance. Outtakes from the leaders are included below.
A wakeup call for transformation
The 2021 assessment by the Intergovernmental Panel on Climate Change torpedoed the myth that the climate crisis is a theoretical problem that may only impact future generations.
Instead, it sharpened minds to the reality that we only have a 6-8 year window before rising global temperatures will be unstoppable. As the UNGC-Accenture report underlined, there has also been a wakeup call for CEOs that the sustainability transformation has to start now.
According to Jurgen Coppens, Managing Director of Accenture Strategy in the ASEAN region, “CEOs and business leaders that have committed early to sustainable changes to their business models will achieve a competitive advantage as a result”.
He highlighted key changes such as accelerating R&D investment in climate resilient solutions, reskilling their workforce in sustainability practices, and quickly moving away from fossil fuels.
The influential position of CEOs in determining business strategy means that they can be among the most effective activists for sustainability, guiding their firms to quicken change.
Dr. Pakorn Peetathawatchai, President of The Stock Exchange of Thailand, emphasized that it is incumbent upon the CEO to ensure that “sustainability is embedded across the value chain, not just to maximize profit but also to balance planet to ensure sustainable business growth.”
The sustainability mindset
But what shapes a CEO’s sustainability mindset? Do they assume their posts with a sustainability agenda from day one or is it catalyzed by business events over time?
For John Ng, CEO of electricity provider YTL PowerSeraya of Singapore, it started early on in his career, as a young boiler engineer in the 1980s. He realized that the power generation industry cannot continue to operate in ways that negatively impact the environment.
When he advanced to senior management, he ensured PowerSeraya were an early adopter to sustainability through GRI, building credibility with customers. As he put it, “sustainability is not something a company can run away from, it is practice that needs to be embraced”.
TG Limcaoco, President and CEO of the Bank of the Philippine Islands (BPI), agreed on the value of reporting in advancing a company’s sustainability agenda.
“Sustainability is a must. Set a goal, measure, report – what gets reported, gets done.”
“But doing it is not enough. We have to do it fast.” Starting out with a typical financial-first mindset, he attributes his sustainability awakening to his experiences working for BPI, who have been a supporter of the Sustainable Development Goals since first introduced.
Communication is key
A truly sustainable CEO also recognizes and responds to the interests of all stakeholders, external and internal. TG added: “buy-in as an absolute necessity – ingrain sustainability into the strategy, make sure that everyone across the group buys into it, and present programs to ensure that investors and other constituents understand what you do.”
Jareeporn Jarukornsakul is Chair and Group CEO of WHA Corporation PCL, an integrated logistics company in Thailand said, “a sustainable CEO must be forward-looking, not just able to transform the company to adapt to the changing times but also to transform as a leader.”
She said that you can effectively communicate with stakeholders by listening to their needs.
Collaborating for a sustainable future
Even when a business has a sustainably focused CEO at the helm, they need support from others to truly effect the change that is needed to secure lasting, sustainable outcomes.
Sir David Attenborough said in his address at COP26, “if working apart we are a force powerful to destabilize our planet, working together we are powerful enough to save it”.
That is why we need CEOs that are committed to transparency and accountability for the impacts their organizations have on people and planet, with greater collaboration between companies, and joint-working between governments and private sector.
Business, society and the environment all stand to benefit if we work together to overcome.
As CRO, Ásthildur Hjaltadóttir oversees the work of GRI’s seven Regional Hubs as well as being responsible for the Content Development and Program Delivery teams.