Leadership and Sustainability

Article Leadership and Sustainability by Professor Pierre Casse, IEDC- Bled School of Management, Visiting faculty, Moscow School of Management – Skolkovo, Chairman of the Foundation Pierre Casse (Belgium) and Professor Gazmend Haxhia, President of Albania Experience Company, Tirana – Albania-Co Founder and Lecturer, Polis University, Tirana-Albania.

The Problem with Sustainability

“The first rule of sustainability is to align with natural forces, or at least not try to defy them”, P. Hawken

Many people simply don’t understand the concept of sustainability. Unfortunately, the term has different meanings for different people depending on their cultural background and the nature of the societies in which they live. Moreover, “sustainability”, as a concept, has different resonance depending on whether you work in the public or private sector. The problem with sustainability is a complex one and the lack of any common understanding, and the implications it may have for the future of mankind, is an important consideration for the 21st century leader. It is one which must not be underestimated.

Despite the inevitable complexity in comprehension, it is fashionable to express interest in sustainability. However, one can be forgiven a proclivity towards cynicism when one observes advocates, in whose interest it is to shroud the issues in blankets of unnecessary confusion, befuddle and bewilder. When challenged, these “so-called sustainability gurus” immediately resort to aggression and derision. Let’s be honest, “one man’s confusion is another man’s meal ticket”.
But what is happening in the “real world”? In general, most leaders will defend the following assumptions and values; they will claim that sustainability involves maintaining a delicate balance between:

• Ensuring that the organization and its key operations will endure;
• Carefully considering the implications of their decisions on the day-to-day lives of ordinary people;
• Protecting the environment so that future generations will be able to enjoy the world’s riches of which today’s leaders are temporary custodians.

Whilst it’s true that most leaders will be happy to sing from the sustainability song-sheet since they know that people are concerned, there are a few champions who sing louder than others. These proponents reiterate the chorus in harmony:

• We are destroying our environment and our actions, if we persist on our current course, will hurtle us headlong towards an inevitable doom. We are destroying the very fabric of our world through “pollution”;
• We are developing our social sensitivity and as we do so we realise that some of our behaviours are not in our best interest and may even be detrimental to those around us. Smoking in public is no longer socially acceptable;
• We have reached an advanced sense, and understanding, of history and as a result we are becoming more attuned to the implications of our behaviour in the present for future generations. We give consideration to the legacy we will leave to our children’s children and we feel responsible.

The fears and concerns that underlie the concept of sustainability, despite the lack of common understandings as to detail, are serious and have given rise to movements in society which question the fundamental assumptions which drive our attitudes and behaviour. For instance, no corporation in today’s world can afford to ignore the importance of “Corporate Social Responsibility”.

A new Perspective and the Sense of Urgency

“Economic activity should not only be efficient in its use of resources but should also be socially just, and environmentally and ecologically sustainable”, Warren Bennis

This is the dawn of a new age. We have come to realise that the world is a much smaller place then we had thought. In the 21st “global village” we are all interconnected, and evermore, interdependent. As the global population continues to expand, we must face the fact that the earth’s natural resources are finite. It’s as if we fell off a cliff and have been falling for some time but now, suddenly, we can see the base of the cliff looming large before us. The urgency to act is gathering pace as we see the base of the cliff on the horizon. As time progresses, do we have the courage to take the decisions that must be taken? Where is the leadership?

With respect to the environment, thankfully, initiatives have been both top-down and bottom-up. On the supranational level, the World Business Council for Sustainable Development, the United Nations Environmental Program and the World Economic Forum in Davos are pressing the need to ensure that sustainability is a key consideration on the global agenda. On the national level, few authorities can afford to ignore the need for coherent environmental management policies. The fact is: ordinary people are worried about the future of the world in which they live.

We can’t deny the facts before us. Many of the business models upon which we depend for the betterment of society were designed in an age when the earth’s natural resources were considered infinite. Whole industries grew up around the assumption that the natural resources we need to sustain our survival are inexhaustible. Nevertheless, the disappearance of forests, the depletion of the fish stock, the erosion of the earth’s ozone, and the contamination, in fragile ecosystems, of the water supply tell a different story. Perhaps the most telling evidence comes from the gradual change in weather patterns across the globe.

With respect to trends, the following should be taken into consideration:

• The growth in the global population, and issues arising from demographic shift, can’t be ignored;
• The ongoing development of the “triple bottom line strategy” comprising the 3 key pillars is still a work-in-progress :
• Economic prosperity,
• Social equity,
• Environmental protection,
• Sound decision-making on a range of issues related to sustainable development is slow in implementation;
• The use of measurement tools such as environmental assessment, life-cycle audits and the like, have not as yet become established in the leadership mindset to affect an impact.

Our world is evolving faster than our powers of understanding, and since we no means of anticipating what the future will hold with any degree of certainty, it behoves us to craft strategies which will aim to create a more sustainable world for future generations.

We have seen recent moves in the right direction. One such example in Albania is the Cement Sustainability Initiative related to the TITAN ANTEA green field project which involves the construction of a new cement production facility and development of two new quarries for producing the main raw materials for the operation over a green area. The project, which was funded by EBRD and IFC, is considered as a category “A” initiative by the funding institutions. An Environmental and Social Impact Assessment (ESIA) was conducted with a focus on Environmental Impact Assessment Studies and Quarry Management Plans. A further example involves Albanian Banking Institutions such as BKT, PROCREDIT, and CREDINS amongst others that offer credits to home owners for the sustainable use of power through attractive rates which are subsidised by different international partners.

These examples highlight the human tendency to think that it is elected officials and policy-makers alone that will force leaders to take into account environmental management issues. However, reality shows otherwise. The challenge for politicians in democratic societies is that sustainable development strategies require a long-term vision. Those who hold the political power must think beyond the election cycle if they are to have an impact. There is a need to continue to raise awareness and educate people as to the issues involved.

Some business leaders understand that to be successful in today’s environment, the business model must appeal not only to the market but to the wider community and society as a whole. Some leaders in the field today already include the challenge of “environmental stewardship” in their business agendas and in so doing, inspire their people towards a higher purpose in life.

For instance, on the 22nd November, 2013 some business leaders in Albania, championed a grass-roots initiative entitled “To Clean Albania”. Employees from a variety of organisations, including from companies owned by Gazmend Haxhia, (co-author of this article), organised a plan of action in which they took time off work to clean the city streets. Although a local initiative, the underlying aim was to highlight the need for a wider sustainable agenda. It is hoped that this initiative will lead to other such actions which will promote a sense of mutual responsibility.

Sustainability: Is it sufficiently appealing?

“The great challenge of the twenty first century is to raise people everywhere to a decent standard of living while preserving as much of the rest of life as possible”, E.O. Wilson

As we have highlighted above, sustainability is a “new fashion” and one of the challenges is that people across the world still need to be convinced of its importance. Let’s consider some of the barriers to be overcome:

• The very word itself is unappealing and many people can’t even pronounce it. We need to clarify and promote understanding in a much more strategic and systematic way.
• It is perceived as a fad. But even so, can we afford not to recognise its importance?
• Many cynics believe that it is being used by others as just another way to make money. There is nothing wrong with making money if it is done ethically and in accordance with the regulatory requirements. However it is true that many entrepreneurs see “blue ocean” opportunities in areas where public investment is increasing. Nevertheless private sector initiatives such as those mentioned above in Albania, will lead to a better sense of what the issues are and how to cope with them.
• Some people resent what they see as fear mongering. We are told that unless we act now and modify our attitudes and behaviour we will leave a terrible legacy for future generations. But shouldn’t we have contingencies in place in case the pessimistic view is accurate?
• There are those sceptics who claim that there are too many inconsistencies in the evidence. Supporters of this view are right. There is confusion regarding the very nature and seriousness of the situation. There is a need for a unified central reference point or body of consistent evidence on sustainability.
• There is an imbalance between the interests of first world societies and the needs of the third world. Sustainability requires a joint solidarity involving all societies. It calls for a global strategy.