You may have only recently heard the term “ESG” (Environmental, Social and Governance), but it isn’t new.
What is new: Pivots to ESG commitment. That is a Pivot from earnings-driven leadership and reacting to ESG regulations to leadership committed and proactive to stakeholders and ESG.
Perhaps the most obvious Pivot is in who is selected to lead and govern a company; the C-suite and Board, respectively.
Signs of leadership commitment to ESG
I recently shared a conversation with Sir Rob Wainwright, Senior Partner at Deloitte, head of Deloitte’s North-West Europe cyber security practice, and host of the Insights on Responsible Business podcast (the episode of our conversation will air later this month). We talked about leadership commitment to ESG, orchestrated Pivots toward ESG, and signs that a company’s leadership is committed to ESG.
We see leaders putting ESG out front in their words, in consumer-facing materials such as their websites, etc. Purpose, people, and planet are talked about in conjunction with profit—but not leading with, or focused on, quarterly earnings. Does this necessarily mean that these leaders are committed to ESG? What are some signs that they are?
What I ask of you is to consider many variables, rather than just one, and then look out into the future, and think about where a company’s steps (the actions they take, not only words) will likely take them.
Where might you look? First, look for their courage (vulnerability) to change themselves. In The Pivot: Orchestrating Extraordinary Momentum (2017) I talk about what it takes to orchestrate change in a way that the ability to change in the future, with more early awareness and ease, is present. It first takes a safe place where every person feels safe to speak out and are empowered to step up to take needed actions within their roles.
Courage (vulnerability) to change oneself first
When you look at an organization and its leadership through this lens of courage to change themselves, you will find a sign of commitment to real change. ESG usually requires culture change throughout an organization. This can only start with changes in how the organization is led
Here are a few examples of leadership courage with respect to showing commitment to stakeholders and ESG:
Mary Barra (GM) – What Barra set out to do first (2014) within GM was to orchestrate a culture Pivot from one that placed cost-savings over consumer safety. She had grown up in this cost-savings culture, so had to change herself first. She had to be inspired to then inspire others. Her message was loud, not quiet, and included an estimated $4.1 billion dollar recall, including victim compensation, repair costs, and other expenses. Today she’s focusing the culture on ESG, and a plan to produce only electric vehicles (EVs) by 2025.
Satya Nadella (Microsoft) – What Nadella set out to do first (2014) within the culture of Microsoft was to dismantle the armor of competitiveness that was woven so tightly within the company. In the place of competitiveness, he aimed to insert learning and collaboration. Nadella had been employed by Microsoft since 1994. He had lived in times when a competitive nature served the company. He had the courage to explore possibilities for the future and be different. Early in his time as CEO he became aware of a blind spot in diversity, equity, and inclusion (DEI, part of the “social (S)” pillar of ESG). He showed that he is open to input and changing how he leads. Now with ESG, he is leading Microsoft toward not only stopping emissions that their technology creates but doing so in way to remove historic emissions by 2050.
There are more examples. Reach out to me if you’d like me to write about more examples, or talk to you about what steps you might take to truly show commitment as a leader, or what to look for in leaders.
Consider how you might become aware of the changes in you and your leadership in order to model the way of commitment to a worthy cause or purpose.