Why Directors Must Own Sustainability

Sustainability isn’t yet a key priority for politicians or business leaders. Only 54 per cent of Canadian board members strongly feel “responsible for the social impact of their own organization’s activities.” The industry leaders of tomorrow will likely be the firms that already see the need to take a strategic approach to net-zero—aligning ambitious emissions reductions with long-term business strategy, innovation, and value creation. Because not enough boards are connecting long-term profits to sustainability, the rules of corporate governance and public expectations for a move to socially responsible capitalism have been at odds. Change is somewhat unavoidable because, as the Centre for Building Sustainable Value noted, there are seven monumental forces supporting a business shift towards real sustainability: 1) recognition of sustainability as fundamental to business value; 2) standardization of measurement and reporting; 3) ambitious policymaking; 4) equality, diversity, and inclusion; 5) the influence of leading companies; 6) businesses becoming agents of systemic change; and 7) sustainable innovation and entrepreneurship. Sustainability early movers stand to benefit from leading the charge in acting as firms that strive to produce goods and services that maximize positive societal value while operating within the natural limits of the planet. Holdout companies not only threaten the stability of the planet—they risk going out of business.