Three Strategies for Developing Current and Future Sustainability, ESG Leaders
A common challenge for every business committed to sustainability is recruiting, retaining, and developing the right talent. Companies in Southeast Michigan and beyond are faced with the accelerating need to formalize their sustainability efforts, collect and analyze data, respond to government policies, answer to stakeholders, and more. And they need highly skilled people to lead all of these functions while tying them back to company strategy, operations, and business model. That’s the driving factor for WholeWorks, SustainabiliD, and The Erb Institute, which work to educate current and future business leaders in sustainability. Laura Asiala and the team at WholeWorks help business leaders, professionals, and functional experts accelerate their ability to connect the most important, or material, ESG issues in their organizations to achieve a return on investment and make a sustainable impact across the triple bottom line. SustainabiliD – owned and led by Kerry Duggan – is a strategic advising firm focused on innovating to net zero. SustainabiliD offers leadership sustainability counsel, strategy, implementation, and communication services. In short, Duggan and her team help coach and shape sustainability leadership within businesses. Erb Institute Managing Director Terry Nelidov and his colleagues are preparing the CSOs, CEOs, and sustainability leaders of the future. SBN Detroit posed questions about educating current and future business leaders in sustainability to these three industry leaders to learn their perspectives. Q: What will the impact of future chief sustainability officers have on businesses and society? Asiala: I see the CSO’s responsibility as critical for a sustainable business—at least for the foreseeable future. Three key roles are distinct for this leader. The first is the ability to reframe business opportunities and risks in environmental, social, and economic terms, as opposed to merely economic. The second is the ability to connect the dots between ESG opportunities and risks to contribute to a return on invested capital—and that can either be focused on increasing that rate of return or strategically protecting it. Both are valuable. Without a return on invested capital that meets the expectations of investors, there is no sustainable business. Finally, there is the ability to move seamlessly inside the organization, creating and encouraging a community of like-minded professionals that are seeded throughout the critical functions of the organization. These same attributes are also important in interacting with key stakeholders outside of the organization. This is much more about translation and influence than command and control. Duggan: Maybe it’s time to get away from buzzwords that keep us in one “boutique” corner. Future leaders will need to be able to integrate across their organizations, sectors, and throughout society. The impact needs to touch every corner of the global economy; therefore, we need to think of these leaders as chief integration and innovation officers! Nelidov: An enormous impact, two ways in particular. First, a CSO should be the chief advocate—along with the CEO— for business and sustainability within the company. The CSO needs to have a clear voice with the CEO since the CEO is ultimately responsible for integrating sustainability into all aspects of company strategy and operations. The CSO is there to help the CEO and to ensure that sustainability is not left out of the priorities. In terms of influence on society, the CSO plays a very significant role. The role of business in society keeps growing. Business is the most powerful force in the world. It’s the role of the CSO to harness that power for human rights, and positive social and environmental impact. Stakeholders – both internal and external – are asking companies to play an active role in social and environmental development, and that all points back to the CSO. Q: What kinds of traits do you think ultimately make someone a strong CSO? Asiala: It’s very important to have a trusted, respected leader and people on his/her team who can work across and within the company to identify the most important ESG issues and translate them both into competitive strategy and positive impact – socially, economically, and environmentally. That’s because integrating sustainability into an enterprise is not only the responsibility of a few select professionals, but the necessary work of a broad array of business functions: marketing and sales, business development, consulting, sourcing and supply chain, manufacturing, operations, and logistics, research and development, product development, IT, finance, and HR, among others. More than ever, a critical success factor is to equip managers and functional experts to integrate sustainability into the areas of the business for which they already have responsibility and authority. A CSO needs to lead that effort and create an environment for ongoing learning, experimentation, and innovation. That’s more than making resources available—although it is that—it’s about creating a community of support, encouragement, and accountability around these issues. Duggan: In many ways, you have to have the willingness to put your head down and do the work, not just talk about it. 21st-century leadership in sustainability means you need to understand the technical and financial feasibility of necessary work, but you also need a skillset in community engagement. I’m finding more and more movement in collaboration and creativity. Collaboration is a soft skill and a contact sport. It’s not easy but it’s absolutely necessary. The silos we spend our days in are not helping advance sustainability measures. We need more silo busters on the field! Nelidov: They are, essentially, the same traits that business leaders need but with a focus on science and social/environmental impact. That’s why we created this dual-degree program at the graduate level. CSOs need the skills to be able to understand the impact of science on business, and the impact of business on society. They need to understand climate change and the business implications that come with it. They need a grounding in stakeholders, communities, and social justice. CSOs also need strong people skills and relationship-building skills. They need to understand the changing expectations for business in society and the emerging role of business and nonprofit leaders. They need to get things done for sustainability by
Working at the intersection of Business, Education, and Research for a More Sustainable World
The Erb Institute at the University of Michigan has a mission to create a sustainable world through the power of business. The institute is a partnership between the Ross School of Business and the School for Environment and Sustainability, where students and business partners work together to fulfill this mission. What does this translate to, how does it work, and what impact does it have on Southeast Michigan Businesses? We talked to the Erb Institute Managing Director Terry Nelidov to find out more. Nelidov began his career as a US Peace Corps Volunteer in Paraguay in the early 1990s. Later he served as founding director of INCAE Business School’s Business Leadership for Sustainable Development Network in Latin America, as General Manager for AmeriCasas (a startup land-development company in El Salvador), and then country representative for Catholic Relief Services in Peru. He holds a BS in Industrial Engineering from Stanford University and an MBA from IESE Business School in Spain. Q: The mission of the Erb Institute is to create a sustainable world through the power of business. How do you approach this? A: Yes, this has been our mission for over 25 years and remains our mission today, although our areas of focus have expanded and evolved. When Fred and Barbara Erb endowed the institute in 1996 the focus was on two areas: teaching and research. Over the years the program has evolved to encompass applied research and impact. Meaning we now work to translate research results into practical management tools, case studies, and frameworks for business leaders to put into practice. So today, we have expanded how we think about the work we do into three main pillars; research, teaching, and business engagement. The latter challenges us to be involved in the global dialogue on sustainability and to bring back new questions to inform our research and teaching, while actively sharing the thought leadership of our faculty and students to inform that global conversation. One way we do this is by leading and taking part in global sustainability events such as the SB 2017 and 2019 conferences, the Innovation Forum UK, and more. The Erb Institute is so much more than a teaching institute – it’s about making an impact with businesses and nonprofits focused on sustainability through teaching and research and then sharing the work that comes out of that to scale up our impact in Michigan, across the United States, and beyond. Q: How are you engaging with businesses? A: Great question and my best response would be simply two examples. Recently we hosted the Michigan Business Sustainability Roundtable (MBSR) to bring together senior Michigan business leaders from Kellogg, Dow, Meijer, and others committed to working toward transformational change in social and environmental performance and asked what challenges they have in achieving their goals at the policy level, and how we could support them in advocating together for climate change and racial justice in Michigan. This was a six-month process. We are looking to deepen our connections with policymakers and advocates at the state level and use our collective voices to raise the bar on business, sustainability, and justice in Michigan. The second example involves a groundbreaking research project with Ford Motor Co. In 2018 Ford came to us with a simple but intriguing question, “How can we measure the impact of smart mobility on the human condition?” We launched a two-year research project, co-hired a postdoctoral research fellow, and created the Ford Model of Human Progress. What was particularly exciting about this initiative was that a year later, HP Enterprise attended a Sustainable Brands event where they heard about the model and then took it back to Silicon Valley and began adapting Ford’s model to HP Enterprise’s work in the tech industry. Q: What sustainability issues do you focus on beyond the environment? A: While climate change, water, biodiversity, circular economy, and plastics remain at the forefront, the scope of sustainability has expanded to include a range of social issues, even the very concept of justice and the role of business in a just society. Businesses are being called on to play a significant role here…to support social issues, such as access to education, access to health, and employee engagement and well-being. So, we’ve expanded with this evolution. Indeed, social justice is a significant focus area within our new five-year strategic plan, which focuses on preparing “architects of change” who can work at the intersection of business, sustainability, and justice. Q: How do you think the graduates of the Erb Institute impact businesses? A: We have alumni working in leadership positions in 17 countries. I can point to three examples of how they are making a significant impact. The first is Monique Oxender. While still studying at the Erb Institute, Monique took an internship at Ford and then a full-time position, helping to create their human rights function in the early 2000s. She is now chief sustainability officer at Keurig Dr Pepper, a global platform for sustainability impact. All of that began with her Erb experience. A great example of nonprofit leadership is Laura Rubin, our first Erb graduate. She worked on the Huron River Watershed Council for 25 years and is now a recognized leader in the Midwest and Great Lakes Region in water crisis and habitat issues. A third example is Rep. Joe Tate, who went into public service and politics and was recently elected as the first Black speaker of the Michigan House of Representatives. Interestingly, he was also a USMC Veteran and a former NFL offensive lineman! Q: How do you think the work you are doing at the Erb Institute impacts businesses in general? A: First, the students in class today will be in leadership roles in 10 to 15 years. Second, we make an impact through the power of our ideas and the research of our faculty. The innovations that come out of working with students, researchers, and professors are the ideas that are shaping sustainability going forward. Q: What does the
