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Leadership for the Decade of Action

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Leadership for the Decade of Action LEADERSHIP FOR THE DECADE OF ACTION A United Nations Global Compact-Russell Reynolds Associates study on the characteristics of sustainable business leaders rr-0162-006020 - HNGC co-brand template.indd 1 17-Jun-20 2:58:25 PM FOREWORD As we began the UN Decade of Action and approached the 20th anniversary of the UN Global Compact, it was with an acute awareness that we were not on track to meet the 2030 Sustainability deadline to transform our world. Then came the COVID-19 pandemic, further exposing fundamental weaknesses in our is a leadership global system and the fragile nature of our progress to date. With less than 4,000 days remaining until the 2030 marker, we need to turn commitment into action. As we set out to imperative. recover from the COVID-19 pandemic, now is the time for all companies to raise their ambition for people, planet and The time to prosperity. act is now. For transformation at the level and scale needed, organizations need to focus on making sustainability sustainable. This is more than a matter of strategy, policy and process — it is fundamentally about leadership and These leaders are interesting because they have made people. Leaders on boards and in the C-suite have a progress where others have not. They are pioneering the huge opportunity to make sustainability central to their business transformation that is so critical to help achieve organization’s culture and leadership, yet only in 4 per cent the Sustainable Development Goals (SDGs). The analysis of non-executive and senior executive appointments is of them provides unique insight into the characteristics and sustainability experience or mindset a requirement. actions needed to be a sustainable leader and how that can help us identify, enable and develop the sustainable leaders For this reason, the United Nations Global Compact and of tomorrow. Russell Reynolds Associates set out on a collaboration to answer an important question: how can organizations make Sustainability is a leadership imperative. The time to sustainability core to the DNA of their leadership teams? act is now. To answer this, we conducted in-depth interviews and did background analysis on a group of 55 sustainability pioneers — Chief Executive Officers (CEO) and board members from across continents and industries with a notable track record of focusing on and making progress towards sustainability goals in tandem with commercial results. Lise Kingo Clarke Murphy CEO & Executive Director, CEO, United Nations Global Compact Russell Reynolds Associates 2 rr-0162-006020 - HNGC co-brand template.indd 2 17-Jun-20 2:58:25 PM ABOUT THE UNITED NATIONS GLOBAL COMPACT As a special initiative of the UN Secretary-General, the United Nations Global Compact is a call to companies everywhere to align their operations and strategies with ten universal principles in the areas of human rights, labour, environment and anti-corruption. Launched in 2000, the mandate of the UN Global Compact is to guide and support the global business community in advancing UN goals and values through responsible corporate practices. With more than 10,000 companies and 3,000 non-business signatories based in over 160 countries, and more than 60 Local Networks, it is the largest corporate sustainability initiative in the world. For more information, follow @globalcompact on social media and visit our website at unglobalcompact.org. ABOUT RUSSELL REYNOLDS ASSOCIATES Russell Reynolds Associates is a global leadership advisory and search firm. Our 470+ consultants in 46 offices work with public, private and nonprofit organizations across all industries and regions. We help our clients build teams of transformational leaders who can meet today’s challenges and anticipate the digital, economic and political trends that are reshaping the global business environment. From helping boards with their structure, culture and effectiveness to identifying, assessing and defining the best leadership for organizations, our teams bring their decades of expertise to help clients address their most complex leadership issues. We exist to improve the way the world is led. www.russellreynolds.com The inclusion of company names and/or examples is intended strictly for learning purposes and does not constitute an endorsement of the individual companies by the UN Global Compact. LEADERSHIP FOR THE DECADE OF ACTION | 3 rr-0162-006020 - HNGC co-brand template.indd 3 17-Jun-20 2:58:25 PM CONTENTS FOREWORD 2 A NEW LEVEL OF AMBITION IS NEEDED 5 THE RHETORIC-REALITY GAP 7 A NEW MODEL FOR LEADERSHIP 9 THE PATH FORWARD: EMBEDDING SUSTAINABILITY INTO YOUR LEADERSHIP CULTURE 18 CONCLUSION: SUSTAINABLE LEADERSHIP = FUTURE SUCCESS 19 SDG IMPLEMENTATION FRAMEWORK 21 ACKNOWLEDGMENTS 22 APPENDIX: STUDY PARTICIPANT BREAKDOWN 24 4 rr-0162-006020 - HNGC co-brand template.indd 4 17-Jun-20 2:58:25 PM A NEW LEVEL OF AMBITION IS NEEDED The legitimacy of major commercial organizations burdened with most of the suffering, risk of illness and and the people that lead them — be they on the board, need to sacrifice due to the pandemic. Fewer than one or in the C-suite — is being questioned in new and in three believed CEOs did a good job in responding fundamental ways. to the demands placed on them by the pandemic.3 Business cannot thrive in a world of poverty, inequality, A broad set of stakeholders — including customers, unrest and environmental stress and as such, has a employees, investors and suppliers — are challenging vital interest in ensuring the 2030 Agenda is delivered. companies to respond to changing societal values, concerns about climate change and finite natural The Sustainable Development Goals (SDGs) provide resources and economic and political instability. a robust framework for addressing many of these As a result, the criteria and economic models that inequities, but the evidence is clear that we are not ensure commercial success are shifting. Successful on track to meet them. While there have been bright businesses will be those that meet the needs of as spots of progress in a number of areas, advancement many people as possible, utilize as few resources as towards the SDGs has been slow or even reversed. possible and engage with and are responsive to as Climate change, loss of biodiversity, extreme poverty many of their stakeholders as possible. and widening social and health inequalities continue to present existential threats to our future. Successful While analysis conducted by the United Nations delivery of the 2030 Agenda requires engagement Global Compact in 2019 showed that more than three from all businesses. Now, more than ever, business quarters (76 per cent) of CEOs believe sustainability leaders face both an opportunity and an obligation to and trust will be critical to competitiveness in play their part in this effort. their industry in the next five years,1 the COVID-19 pandemic has further exposed fundamental weaknesses in our global system and the need for a new type of business leadership. UNDERSTANDING THE SCOPE OF The 2020 Edelman Trust Barometer results make for sober reading. They point to a growing sense of SUSTAINABILITY inequity — more than half of respondents globally Throughout the report we use the term reported that capitalism in its current form is doing “sustainability” to encompass environmental, more harm than good.2 The pandemic has only served social and governance issues as covered by the Ten to further highlight societal inequities: 67 per cent of Principles of the United Nations Global Compact and those sampled agree that those with less education, the UN Sustainable Development Goals. less money and fewer resources are being unfairly 1. The Decade to Deliver: A Call to Business Action, The United Nations Global Compact-Accenture Strategy CEO Study on Sustainability, 2019 2. Edelman Trust Barometer 2020 (Global Report), January 2020 3. Spring Update, Trust and the Covid-19 Pandemic; Edelman Trust Barometer 2020 LEADERSHIP FOR THE DECADE OF ACTION | 5 rr-0162-006020 - HNGC co-brand template.indd 5 17-Jun-20 2:58:25 PM FIGURE 1: LACK OF PROGRESS TOWARDS THE SDGs On track for 700 257 3.5°C 8 million people in more years to close temperature rises million metric tons of extreme poverty the economic gender this century per plastics enter our gap at the current current commitments oceans every year pace World Bank (2018), Poverty and WEF (2020), The Global Gender UNEP (2019), Emissions Gap Science (2015), Plastic Waste Shared Prosperity – 2015 Gap Report 2020. Report 2019. Inputs From Land Into The Ocean. Forecasts. The good news is that it is still possible to shift “We have a rare and short the world onto a 1.5°C trajectory, reduce global window of opportunity to inequalities and achieve the SDGs by 2030. The Global Goals will help us build a better future, rebuild our world for the however, this will require bold leadership and business better and therefore we transformation. The UN Global Compact is calling need to focus more than on companies around the world to raise their level ever to ensure that our post- of ambition to meet the needs of society and planet by fully integrating sustainability into their strategy COVID strategies, goals and operations, anchored in company purpose and and plans fully integrate governance.4 This is a question of legitimacy and the SDGs to create a strong license to operate for businesses and those that lead them. and more resilient world.” António Guterres United Nations Secretary-General 4. SDG Ambition, Scaling Business Impact for the Decade of Action; United Nations Global Compact, Accenture, SAP; 2020 6 rr-0162-006020 - HNGC co-brand template.indd 6 17-Jun-20 2:58:25 PM “ At the beginning of the THE journey, if the CEO is not the engine of this, it cannot work.
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