There is a new marketplace requirement that is quickly becoming increasingly imperative for the leaders of today. Sustainable business transformation is the next big disruptive change coming through the corporate world, and savvy change leaders are starting their transformation now.
The challenge is big
Whether it’s because leaders have their eyes on the future, employees and customers are seeking more and more to align with responsible businesses, your supply chain partners are requesting new sustainability criteria, or the marketplace is demanding greater transparency in reporting…your spidey sense should be notifying you that change is imminent in the sustainability domain.
What is happening?
The United Nations Sustainable Development Goals (SDGs) happened, and the world is responding with the desire for more positive impacts from organizations:
- An ever-increasing number of organizations are concerned with the ecological and environmental impact their organization and its products and services may be having on the earth. As a result, they have opted to “go green,” developing plans and strategies that are geared toward reducing the environmental impact of the company.
- Organizations are re-evaluating their relationships with the people that they recruit, that they employ, partner with, and serve to retain top talent and ensure diversity, inclusion, and equitable treatment for all stakeholders.
- Shareholders are demanding transparency and proof of ethical business practices.
- Society wants organizations to be a force for good.
Most of these initiatives are being treated as incremental changes, or businesses are going after low-hanging fruit in one or several areas (targeting the effect, not the cause)– most haven’t tackled the business transformation that is required to become a truly sustainable business that leaves a net positive impact.
What’s required to become a sustainable business?
A sustainable business is one where leaders at all levels embrace in mindset and behavior, sustainable strategies, responsible business practices, and the triple bottom line concept so the organization can affect positive environmental and societal change AND earn a profit.
Becoming a sustainable business requires business transformation. All areas of the organization must get involved to ensure the success of the initiatives. This requires a great deal of collaboration, culture change, and airtight leadership alignment – new ways of thinking, working, and leading.
“companies with high ratings for environmental, social and governance (ESG) performance enjoyed average operating margins of 3.7 times higher than those of lower ESG performers…”
As with any disruptive change, it can also mean that the production of the organization may take a direct hit (at first) as environmental and social impacts become far more important considerations. Great news! There is a pot of gold at the end; according to Accenture, ‘companies with high ratings for environmental, social and governance (ESG) performance enjoyed average operating margins of 3.7 times higher than those of lower ESG performers. Shareholders also received higher annual total returns to shareholders outpacing poorer ESG performance by 2.6 times.’ This theme is being proven over and over, so for those companies in it for the long haul, it is possible to make a positive impact and grow economically.
The push to make sustainable business a reality
While this presents a significant challenge for many organizations, the reality is that failing to listen to this wake-up call is not permissible in today’s environment. Far too many employees and customers (including external stakeholders and governments) are demanding that organizations take steps to reduce waste, improve efficiency, protect the environment, and deliver positive impacts on people and society; otherwise, they will take their business elsewhere.
Responsible business transformation is not insurmountable
Many organizations are leading sustainable strategies that keep the company operational and profitable while also meeting its ESG goals. You can do it too, and we will help you design your change process so you can join the ranks of organizations seeing success as they adopt sustainable business practices.
Sustainable new ways of working are a requirement of the future. A company must embrace these types of changes, or they are going to find that the sustainability of their own business is in jeopardy.
Written by Leslie Ellis, a Top Change Management Voice on LinkedIn and recently recognized as one of 2023’s Top 50 Most Dynamic Women in the Charlotte Region. Leslie is also CEO of Meaningful Change, a change advisory firm and certified woman-owned small business.