Divides and Dividends | Leadership Actions for a More Sustainable Future

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Clarke Murphy

Board and CEO Advisor, Russell Reynolds Associates

Today’s business leaders face nothing short of a global reckoning: a trifecta of a full-blown climate crisis, an ever-widening social equity chasm, and a still-raging global pandemic.

Yet within challenges lie opportunities.

Leaders who understand that stakeholders—employees, customers, shareholders, regulators, and communities at large—increasingly expect them to help solve the world’s challenges will be better positioned for growth and more competitive. Shareholders are making sustainability a criteria for investment; consumers want to buy sustainable products and services; top talent want to work for companies that have a clear purpose and address inequities; and regulators will increasingly reward sustainable business practices.

There is much talk of sustainability and many organizations have been quick to promote their sustainability credentials. But rhetoric does not always equal action. Against this backdrop, Russell Reynolds Associates set out to understand the real state of sustainability within organizations by surveying three distinct groups: C-suite executives, next-generation leaders and employees.

We wanted to understand whether these groups were united or divided in their view of key issues, the maturity of their organization’s sustainability strategy, and the ability of their leaders to advance the sustainability agenda.

The resulting global study, Divides and Dividends: Leadership Actions for a More Sustainable Future, is unprecedented in its scope and scale. Fielded across 11 countries, it examines how a cross-section of the global workforce views, experiences and prioritizes the most important challenges affecting society, businesses, and workers.

Five key themes emerged:

1. Macro, Micro, and “Me” Priorities
C-suite executives and employees agree on the big issues that most affect the future of society: climate change, pollution and global pandemics. But employees also want to see action on the work-level challenges that affect them. Leaders must keep focused on both macro and micro issues to mutually benefit individual and business interests.

View survey results and data

2. Brand-Centered Motivation versus Value Creation
Organizations’ sustainability actions are largely initiated by brand management or risk mitigation concerns—putting them in danger of only engaging with sustainability at a surface level. Those that see sustainability as a critical lever for value creation will make the biggest strides forward in the next five years.

View survey results and data

3. The Say/Do Divide
C-suite leaders say they prioritize environmental issues and are taking concerted action on climate change. Employees are skeptical that this is really the case. At best, organizations have a perception gap that needs managing. At worst, they are falling short of the bar that employees consider real action.

View survey results and data

4. Next-Generation Leaders at the Vanguard
Next-generation leaders are the most engaged drivers of sustainability action. They are in the trenches, overcoming barriers and yielding results. Organizations looking to accelerate their sustainability agenda should find ways to further empower and reward their future executives.

View survey results and data

5. Leadership + Culture = Impact
Slow-changing company culture and organizational complexity are top barriers to embedding sustainability across business strategy. To overcome these obstacles, leaders must use soft skills, such as authenticity, humility and self-awareness, to inspire change and galvanize action. Tellingly, few employees and C-suite leaders think their leadership teams display these attributes.

View survey results and data

Ultimately, a changing world requires businesses to change along with it. That change should be led from the top. CEOs, board chairs and directors must now take concerted action on sustainability. This is more than a matter of policy and process. It is a matter of leadership. There are three interconnected areas of action that leaders must focus on, as detailed in Section 6 of this report:

• Lay the foundations: Embed sustainability into leadership capability and culture.
• Set the plan: Connect sustainability priorities to the core.
• Enable the change: Communicate and build employee engagement.

Addressing our most pressing societal and organizational issues requires a shift in mindset and culture. Leaders must possess the courage to drive sustainability to the heart of business strategy, the humility to listen to employees, and the vision to develop and empower their next-generation leaders. For those who do, triple-line dividends await. Never before have leaders had such levels of knowledge, education, connectivity, and the ability to innovate. As such, they have an unprecedented opportunity to guide their organizations, and their wider community of stakeholders, towards a vision of the future that is more hopeful, sustainable, equitable, and resilient. What is required is the collective will, the drive and the discipline to change the way the world is led.

This report is vital to achieving that.

About the Study

The business case for sustainability is undeniable. Leaders who bridge the divides that threaten our global societies will yield significant triple-line dividends.

In a major global survey of C-suite executives, next-gen leaders, and employees, we reveal how leaders can grasp this opportunity:

• What are the environmental, social, and economic divides that leaders should solve?
• How ready are leaders to advance the sustainability agenda?
• What actions should leaders take to deliver lasting value for people, planet, and profit.

The study was conducted with 9,500 employees and next-generation leaders in 11 growth and mature markets from April 16 to May 12, 2021.