Leading From the Top Down: Why Sustainability Starts with the CEO

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Leading From the Top Down: Why Sustainability Starts with the CEO

The business world of today is technologically driven, and more directly interactive with consumers than ever. This means that more people are aware of what a business is doing (or isn’t) and are more familiar with who the CEO and the high-ranking board members behind the business actually are. Regardless of your industry, social media and the ability to report news across the globe almost instantly, has seen a huge change in the way standards are maintained and shared, and how opinions are formed – from consumers, investors, potential business partners, and governments alike.

The Figures Behind the Facts

Before we start talking about sustainability, and the importance of the CEO setting a good example, I want to share some statistics with you, that will give context to what this blog is talking about.

  • There are currently 4.59 billion social media users worldwide (approximately 58% of the global population). On Instagram, 90% of accounts follow at least one business

  • 70% of consumers feel more connected to brands with CEOs who are active on social media

  • 82% of employees will research a CEOs online presence when considering joining a company

The visibility and responsibility of the CEO is more open and in the public arena than it has ever been before, and the impact of this can be felt in how the CEO conducts themselves, whether they are seen to be actively championing and upholding the values of their business, and whether the consumer trusts that they’re being honest.

What Impact Does a Lack of Trust in the Sustainability of the Business Have?

At present, nearly one in two consumers either doesn’t know what information to trust, or state that nothing can influence how much they trust a business’ commitment to sustainability – this is clearly an issue, as consumers across all generations are now generally wiling to pay more for sustainable products.

In 2020, 34% of Gen X consumers said they would be willing to spend an extra 10% or more on sustainable products, however now in 2022, 90% say they would be willing to do so.

There is a clear and growing demand for sustainable business, but still a lack of trust in the authenticity of businesses to do what they’ve said they will.

Why Does the CEO Need to Lead on Sustainability?

The CEO is the leader, the top of the business and in many cases, the face of the company. When people research the brand (whether that’s for purchasing, employment, or investment opportunities), they are likely to look at who the CEO is, what they are doing, and what they have been saying.

Having a CEO who encapsulates the brand message and values, and who creates value for the business by accelerating it and giving it credibility, commitment, and trustworthy respect, is essential.

Organisation who lack this approach are likely to find themselves losing market share, see their brand’s marketing power diminish, lose talented potential employees to other businesses (54% of employees say they would be more likely to work for a company that provides the tools and resources to become more sustainable, and one in four 18 – 24 year olds would not work at a business that profited from unsustainable practices), and will lose out on investment opportunities (75% of investment leaders expect ESG factors to become more influential).

CEOs need to take the lead on Environmental, Social, and Governance (ESG) issues, especially as regulations and requirements are becoming stricter – when it comes to Climate Change, 77% of Executives reported regulatory pressures to act.

They need to lead by example, and show stakeholders and customers, that the visions of the business, and the values, aren’t just lip-service – they’re a core component, which they take seriously, and are personally invested in.

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How Can CEOs Promote Sustainability More Effectively?

Leaders have to be seen talking the talk, and walking the walk – so before any announcements or public information is released, it’s essential that the CEO has carefully analysed their own actions and made sure they align with the values they are promoting – if the CEO, for example, is championing a reduction in carbon emissions but uses expensive private jets to attend conferences around the country, this disparity will be picked up on by the media and the general public, and reduce the effectiveness of any sustainable development marketing opportunities in the company.

Strategic decisions, careful evaluation of action, and open, honest, transparent communication with employees, stakeholders, and consumers must be a the heart of a sustainable strategy, so the CEO can speak with authority and a level of trust.

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