Rob Lake: What might a sustainable organisation and leaders look like?

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.

Engagement and commitment.
There’s a lot of work to do in sustainable finance. The challenges are big and time is short – less than twelve years to keep global warming to a maximum of 1.50C. This means we need maximum engagement and commitment by everyone – not just people with ‘ESG’, ‘responsible’ or ‘sustainable’ in their job title.
Engagement and commitment come when what psychologists call our ‘seeking system’ – the part of our brain that craves exploration and learning – is activated. What keeps the seeking system happy? Here are few examples (taken from Alive at Work, by Professor Dan Cable):

• encouraging people to bring their ‘best selves’ and their ‘real selves’ to work – to show the qualities and characteristics we display when we are at our best, including who we are in our lives outside work. As the CFA Institute says in its work on diversity and inclusion, ‘It is a powerful outcome when people begin to see their shared humanity through something as simple as sharing a story or experience. Storytelling promotes connected, authentic working relationships’.
• framing change as a chance to experiment and learn, rather than the imposition of something new and alien from outside. (And to me this rings very true indeed in the world of ESG.)
• helping employees experience the impact of their work.

Activating the seeking system is not just about intellectual understanding; it’s about a sense of emotional connection with a purpose. As Cable puts it, ‘Leaders can help [people] experience purpose rather than trying to issue purpose’. Portfolio managers meet clients, certainly. But how often do they meet ordinary pension fund members? How much do they know and understand about their lives? How emotionally connected with them do they feel?Drawing it all together – leadership.
‘Leadership’ is almost as over-used a word as ‘purpose’. But leadership matters. A lot. A leader’s style and tone, the messages she sends, the expectations he creates, what s/he welcomes and rewards vs. what he/she discourages and prohibits, her/his degree of self-awareness: all these help to shape the organisational culture within which sustainability will flourish or fail. And this is about what leaders do day-to-day within their organisation, not just what they say on conference platforms.
What approach to leadership is most likely to foster the organisational characteristics we have explored here and to enable the investment industry to progress faster towards sustainability? The discussion here suggests that we need leaders who:

• authentically express their values and their sense of purpose in life: leaders who demonstrate that they are human and care, so that their employees can be human and care too;
• see the ‘bigger picture’, understanding how they and their organisation affect sustainability issues and are affected by them, and where they fit within environmental, social and financial systems;
• can put themselves in others’ shoes, displaying empathy and compassion;
• draw on these capacities to create an inspiring purpose for their organisation, founded on service beyond the self – to clients and society;
• see commercial or organisational challenges as opportunities for growth and development;
• welcome and encourage the expression of values by employees;
• seek and respond to input from staff, and embrace diversity in all its forms.

Where next?
As I said earlier, this two-part article is a first attempt to sketch out some of the qualities we might need in investment organisations that are equipped to deliver faster and more effective change towards a more sustainable and fairer investment industry and financial system. This is a discussion that needs the contributions and creativity of us all – whether or not our job title includes the terms ‘ESG’, ‘responsible’ or ‘sustainable’.