The 4 competencies that ESG companies will require from top leadership

Far beyond the financial market, ESG has also transformed the way companies recruit, train and evaluate their leaders

Exame | February 25, 2021

The Exame article, "The 4 competencies that ESG companies will require from top leadership​," quoted Russell Reynolds Associates Consultant Mariane Montana on the qualities of sustainable leaders and how companies can adopt sustainable leadership. A translated excerpt of the article is below.

The philosophy of stakeholder capitalism, the prioritization of all interested parties and the pressure from investors and consumers for greater social and environmental responsibility have accelerated the adoption of the ESG agenda in Brazil. Apparently, the importance of the topic has also invaded the job market.

According to research by consultancy Russell Reynolds Associates in partnership with the United Nations Global Compact, the human resources sector of large companies has already started to look for new profiles for senior leadership positions. The impact is also on the performance of the administrative councils, which start to adopt an engagement posture, and are responsible for bringing to the table issues relevant to the environmental and social performance of companies, according to Mariane Montana, partner and consultant in the sustainability practice of Russell Reynolds Associates.

During the survey, 55 CEOs and board members from different countries were heard. What makes a CEO be considered “sustainable”, the interviewees point out, is multilevel systems thinking, that is, the ability to include different agents in the construction of the company's strategy, which includes partnerships with academia and public bodies.

A second competency is the ability to include stakeholders in the transformation process, not just during the company's financial management. In practice, this means that the leader needs to understand the impact of business decisions on everyone involved and above all on the surrounding communities. "The focus is inclusion to create collaboration and partnerships, understanding that it is necessary to analyze all the impacts of decisions on the parties involved," says Montana.

More empathetic leadership profiles tend to be more successful in demonstrating all competencies, according to Montana. “Authenticity and transparency are characteristics that we see in leaders who best fulfill the four most important characteristics in sustainable CEOs,” she says.

"It is necessary to adopt new practices to follow the conduct of teams and businesses, with more knowledge around risk management and on the social and environmental impact of organizations. In addition, it is necessary to create a culture corporate strategy based on the commitment of top leadership to a mindset focused on sustainability and new indicators for the remuneration of these executives,” says Montana.

To read the full article, click here.​

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The 4 competencies that ESG companies will require from top leadership