Part 1 of a 2-part piece looking at the leadership, values, cultures and relationships that will help create the responsible companies of the future.
Be part of the debate! We are holding a breakout session on Purpose, Values, Leadership and Culture at the RI Europe conference in London on 11 June, 2019. To play your part in shaping that session, complete a short, anonymous survey on your own experiences in your organisation on the issues explored in this article. We will discuss the results of the survey at the conference. Click here to take the survey. It will take no more than fifteen minutes.
What’s the problem?
Sustainable investment and finance are making rapid progress. We know what kinds of investment beliefs, policies and processes we need to make investment and finance sustainable and responsive to the real needs of clients, society and the planet. We know how many trillions of dollars, pounds, euros, renminbi and yen need to be shifted from ‘brown’ to ‘green’. We know what investors should be asking companies and policymakers to do. We have – or we will soon have, in some parts of the world – taxonomies and definitions, regulations and requirements.
Yet amid all this activity we have devoted little attention to a crucial part of the system – the internal workings of the organisations that are conducting the activity that we need to deliver more of, and faster. We have looked at the hardware of structures, policies and processes. But hardly at all at the ‘software’ of styles of leadership: values, internal cultures, and the quality of relationships among the people in organisations.
Policies, organisational processes and investment decisions are visible in the ‘outside world’, and we think of them as being products of the rational mind. Yet they are strongly influenced by the ‘inside world’ of our values, emotions, memories of life experiences, and assumptions and beliefs that we may not even consciously realise we hold. This is the reality of being human. And since organisations are collections of human beings, this interplay between the rational and the ‘other than rational’ – between the head and the heart – is at the very core of what organisations are all about.
What characteristics might we therefore want investment
organisations to display if our objective is that they should provide the most fertile possible soil for sustainability and responsibility? And if as an essential part of this – and as an equally important objective – we want them to be humane workplaces that allow people to flourish and grow?This two-part article is a relatively informal attempt to explore this territory in the hope that it will add a new dimension to the discussion about how to achieve a sustainable financial system.
Looking at organisations that have made the greatest progress towards fully embracing sustainability, I think we can observe three interlinked characteristics that they have in common:
What do we know about each of these characteristics: why they matter to organisations and how they can be generated?
Purpose and values.
‘Purpose’ has become such a buzzword that reading it might cause you to groan. Yet it has become so widespread in part because, in the words of Professors Dan Cable and Freek Vermeulen of London Business School, ‘research repeatedly shows that people deliver their best effort and ideas when they feel they are part of something larger than the pursuit of a paycheck’.
That sense of ‘something larger’ cannot just come from speeches by the person at the top of the organisation.
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