As companies’ ESG ambitions become greater and more urgent, the topic of leadership is in the spotlight. Effort will of course be required at every level of the corporate hierarchy, but how can the team at the top ensure they have created the right environment to encourage responsibility amongst the troops?
Three guests joined EG to tackle the topic at MIPIM. Here are their takes on the three attributes they say are crucial.
Culture
Jess Kennedy, associate director and ESG advisory lead UK, Arup
“When companies come to us, we test the benchmark of where they are on a sliding scale. Do they want to be leaders, do they want to be close to leaders, do they want to be following the pattern? What’s their attitude to risk?
“Before we have those conversations, it’s helping them work out where to start and how to create that culture. They’re more interested in how are we going to get success, how are we going to achieve the outcomes that we want to achieve, how are we going to work out what those outcomes are? Our approach is to create a process or a way of working with the client that enables that sense of leadership and culture.
“A key aspect is getting that buy-in. From the start, it’s looking at all the stakeholders that need to be involved. You start with top management – without that, you’re not going to have the resourcing or the commitment that’s going to flow through the organisation. Understanding the drivers, being able to put the business case forward, is really important to get support at that level.
“Then you need to look at the structure of the organisation, the roles that you need around – head of sustainability or similar. You need that person to own it, to be driving momentum and inspiring change. But it’s important that person is not tasked with delivering the whole thing. A big part of the leadership that needs to be embedded is understanding it’s a responsibility of all parts of the organisation.”
Conviction
Petri Valkama, partner, NREP
“The whole transformation in a company will start with the conviction of the leadership. The companies that take the steps and manage to scale them are the ones where there is the conviction that this is the direction we are going to find the future of the business. Some find it in themselves and in their vision – that this is where the whole industry will transform. But we still see a large part of the industry where what we need is the government and regulation to put their foot on the ground and say ‘this is it’.
“We get questions about UK regulation, about the required EPC ratings in the office space. You need to keep them, you need the government to tell everybody we are not going to let loose. We know that only 13% of the office market today is compliant with the 2030 goal.
“But they need to say, ‘that’s not going to move and yes, somebody is going to take a loss here’. You need to give that message because there’s so much of the industry where the leadership is not yet there, and they need to hear the hard message.
“It’s these minds that need to move and then the organisation is going to move with them. That is not easy either, but it all starts with a conviction.”
Creativity
Daniel Chang, managing director, ESG, Hines
“We tend to think of governance as frameworks or structures or due diligence – checklists of things we need to comply with. But you can also use governance in a way to motivate, inspire and educate.
“We’ve created a forum within our European platform that we call the European ESG League, where we talk with different people across the platform to showcase case studies of how they’ve worked on a project with a particular social agenda initiative, or their decarbonisation approach that helps to inspire. It’s not just about ‘this is what you need to be doing’, but ‘this is what good looks like and this is something that you can work towards’.
“I think that creates a little bit of healthy competition, but also a motivation to learn from that. A lot of that comes from having that governance structure or that forum that allows for that learning and motivation and inspiration.”
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