Other parts of this series:
Bank executives once again may need to adapt and adopt a host of new skills if they’re to guide their organizations to become sustainable businesses.
Foremost is the ability to combine two critical tasks. Senior leaders need to drive the bank’s quest for earnings growth while also growing the firm’s sustainable products, operations and lending.
The two objectives go hand-in-hand.
We’ve found that successful sustainable businesses improve their financial performance while also enhancing measures such as their environmental, social and governance (ESG) credentials. They generate operating profits, for example, that are on average three percent higher than those of their competitors.
What is sustainable leadership?
The ability to increase a company’s earnings while also ensuring that it meets sustainability goals is a key marker of “sustainable leadership.”
What is sustainable leadership? It is the exercise of authority within an organization to advance economic, environmental and social objectives.
Executives who display sustainable leadership see the global shift to sustainability as an opportunity to strengthen their businesses. They promote a culture of sustainability throughout their organizations that aligns corporate profit with social purpose. Such leadership encourages trust, innovation and growth. It recognizes and honours the contributions of employees, investors and customers. Companies whose executives display sustainable leadership enjoy strong staff retention, high investment ratings and enduring brand loyalty.
To practice sustainable leadership, bank executives need a deep understanding of the challenges and opportunities emerging from the global clamor for sustainability. The front-runners will have the vision to see a future that is very different from the present. And will recognize the likely effects of these changes on financial services. What’s more, they will be prepared to disrupt traditional business practices and attitudes.
Sustainable leadership skills framework
To help executives, and other leaders, develop sustainable leadership we’ve devised a framework that highlights the qualities they should develop. It comprises five essential components.
- Stakeholder inclusion: Sustainable leadership requires leaders to foster trust among all the organization’s stakeholders. It encourages accountability by ensuring diverse participation and perspectives in key decisions. It nurtures an inclusive environment where participants feel they belong.
- Emotion and intuition: Leaders who display sustainable leadership are empathetic and understanding. They recognize and acknowledge their own limits and encourage others to exercise their talents, intuition and imagination.
- Mission and purpose: Sustainable leadership requires leaders to articulate and promote a vision of the future in which an organization and its stakeholders achieve sustainable prosperity. They must set objectives and make the changes needed to reach this vision with integrity and transparency. They should keep stakeholders informed of the organization’s progress towards its sustainability objectives.
- Technology and innovation: Sustainable leadership recognizes that new technologies are essential drivers of the transition to sustainability. It encourages innovation to solve problems and capitalize on opportunities. Such leadership also ensures that companies apply technologies responsibly. It seeks to enhance the quality of people’s lives and the wellbeing of their environment.
- Intellect and insight: Continuous learning is the bedrock of sustainable leadership. Leaders in organizations committed to sustainability should constantly seek and evaluate new sources of information to guide their transformation. They ought to consider analytical approaches such as critical thinking, to challenge established conventions and practices, and systems thinking to devise solutions to complex problems that affect many parts of their organization.
To test the extent of these sustainable leadership qualities within your organization, take our rapid diagnostic. If you’d like to discuss your results or learn how your company can develop its sustainable leadership, contact me here. To learn more about transforming your company into a sustainable organization, read our Organizational Sustainability Transformation report:
Read ReportIn my next blog post, I’ll examine the changing role that banks need to perform to help the business sectors they serve achieve sustainable change.
