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Why human leadership is good for people and the planet

By Katie Jacobs

From extreme weather events to the cost-of-living crisis, the case for business leaders to take environmental, social and governance (ESG) issues seriously has never been clearer. But with so many competing priorities on the table – global economic and political instability for one – it can be tempting to let ESG slip off the agenda.

However, doing so is not a sustainable (in any sense of the word) approach. Prioritising ESG can help organisations navigate through some of the toughest challenges they face, from cutting costs through energy efficiency to attracting top talent, creating new consumer opportunities and bringing in varied sources of investment.

Indeed, stakeholders expect leaders to have ESG at the top of their to-do list. According to research from PwC, 83% of consumers think companies should be actively shaping ESG best practices and 86% of employees prefer to work for companies that care about the same issues they do. And from the investor perspective, 89% of investors consider ESG reporting when making decisions.

With all those drivers, it’s perhaps no surprise that focusing on ESG pays off for organisations. According to Deloitte, organisations that achieve their ESG goals are 25-30% more profitable, 30% more innovative and 30% better at avoiding risks. Yet while the vast majority of public companies have ESG initiatives in place, only 21% of people feel their organisation is actually ready to achieve its sustainability objectives.

Commonly cited barriers to success, according to Deloitte, include culture, leadership capability and ways of working. So being people-centric can make all the difference. When we talk about ESG we are talking about people as much as the planet. The ‘S’ in ESG makes human leadership critical to any potential solution.

Applying the principles of human leadership can help create positive change, for people and the planet. Here are six ideas on how…

  1. Help people find their purpose

Feeling a strong sense of purpose has links to people’s wellbeing, motivation and productivity at work – and what could give greater purpose than making the world a better place? Human leaders have high levels of self-awareness of what drives them personally and talk about this openly, encouraging others to do the same. In challenging times, feeling like you are contributing to something bigger than yourself can help people thrive, and collective action on societal goals can make a profound impact.

  1. Create cultures of inclusion

For most organisations, the ‘S’ in ESG is directly linked to diversity goals. But as all human leaders know, diversity is nothing without inclusion. Building a culture of inclusion leads to people from all backgrounds feeling safe and belonging, improving personal wellbeing and boosting innovation and performance. That helps the organisation engage with and meet the needs of diverse external stakeholders, creating healthier communities. Lead inclusively by listening to others, challenging where necessary and giving everyone a voice.

  1. Wellbeing for performance

Healthy organisations are made up of healthy people. Creating thriving cultures of wellbeing (internally and externally) can be a powerful strand of ESG. Additionally, putting excessive pressure on teams to meet sustainability targets could be counterproductive, leading to stress and burnout, and negatively impacting performance. Human leaders value wellbeing: role modelling the importance of personal boundaries, making sure performance demands are not outlandish and encouraging others to take accountability for their own wellbeing. 

  1. Strengths-focused transformation

Moving to a net zero economy is going to require a huge amount of business transformation: jobs, skills and organisational structures will have to change. Taking a human approach to this transformation, empowering people at all levels, can help bring others on the journey. Taking a strengths-based approach helps keep people motivated, helping them see how their strengths can support change rather than getting stuck in old ways of working and being.

  1. Building shared solutions

Only 30% of people feel empowered to make positive changes in helping their organisation reach its sustainability objectives – that is a massive missed opportunity for organisations. Empowering people to build shared solutions could bring potentially game-changing innovations to the table. Human leaders empower others and create safe spaces for them to share ideas without fear of failure or judgement.

  1. Micro actions for macro impact

The scale of the ESG challenge, and climate change in particular, can be overwhelming. But as the climate activist Greta Thunberg has said: “no one is too small to make a difference”. In fact, engaging in small or even micro actions can help ease the eco-anxiety many are feeling. From a leadership perspective, encouraging people to take small steps and celebrate small wins can help boost a sense of positive momentum and wellbeing.

Find out about how Bailey & French can help you develop socially aware, human leaders here.