Shareholders expect your company to generate profits. But, they also want your company to make a positive contribution to society while minimising any negative effect it might have on the environment. This approach to business — balancing economic interests against social and environmental concerns — is commonly referred to as sustainability.
Over the past decade, sustainability has moved from the fringes of the business world to the top of shareholders' agenda. The concept of sustainability has gained traction among corporate employees, regulators, and customers, too. Consequently, any miscalculation or misjudgement of matters related to sustainability can have serious repercussions on how the world judges your company and values its shares.
For corporate management, finding the right balance among competing economic, social, and environmental goals is the essence of “responsible leadership”. In practice, responsible leadership means integrating ethical considerations into company decision-making, and managing on the basis of personal integrity and widely-held organisational values. Responsible leaders manage for the common good and gain authority and legitimacy in direct proportion to their success in serving others.
Is that kind of leadership readily achievable? Clearly, a perfect balance of all competing interests is difficult to achieve and managers are bound to make missteps in the attempt. Nevertheless, most stakeholders are adamantly in favour of companies dealing with sustainability issues in an honest and open fashion. So, as a first step toward demonstrating responsible leadership, companies must establish trust between themselves and their various stakeholder communities. Sometimes, the process of establishing trust can be painstakingly slow. But it starts by understanding stakeholders' concerns and acknowledging their legitimacy. Only after you've mapped the spectrum of stakeholder issues can you start to prioritise them and develop suitable responses and outreach programs.
At PwC, clients look to us both for our focused sustainability skills, as well as the credibility we bring in establishing trust with stakeholders and the wider public. We advise clients that getting on the right side of sustainability will make considerable demands of their time and resources. But that's simply the price of responsible leadership. Is your company ready to assume greater responsibility? If so, we can help in the following areas: