We have reached a tipping point when companies must reinvent their business models to achieve future success. Some industry experts believe reinvention and demonstrating a contribution to society is critical, as companies are chosen by people, employees, investors and other partners. Isabelle Grosmaitre, the author of “Purpose-Led Companies, and How The Next Generation of Leaders Can Change The World”, believes that sustainability has become a competitive edge. 

Businesses must reinvent their business model and prioritise sustainability within their organisation. Incorporating sustainability into the core of a business can be challenging, so how can companies achieve this?

Now, more than ever, sustainability must be at the core of leadership. According to studies by Edie, over 90% of employees believe their CEO engages with sustainability, and 82% think their companies will continue to increase their sustainability goals this year. It’s the responsibility of sustainable leaders to drive ambition into meaningful action.

Communicate and educate

In an Edie survey, three of the most critical skills in future sustainable business leaders are the ability to motivate and empower, collaborating and showing true passion. Sustainability leaders are typically strong communicators, engaging employees, customers and investors. They should also be flexible learners, recognising changes in new regulations and managing the progression of ESG strategies. 

Collaboration is critical

No single business is capable of solving the climate challenge. There is a rising need for companies to collaborate. Sustainable leaders must rethink their approach and not see their competitors as a barrier to tackling climate change. Through collaboration, sharing best practices and learning from others, businesses can make decisive steps towards their sustainability ambitions.

Implementing transparency in an organisation

With progress on ESG, businesses must be capable of showing their commitment and results. With further pressure to disclose information, there are more demands to be transparent about business activities and processes. This level of transparency will remove any claims of greenwashing and emphasise positive sustainability developments.

Take action now to create a long-term plan

One of the main challenges facing companies is accessing investment. With rising investments in new technology and talent, the return on long-term spending may not show for several years. This makes it challenging to secure confidence from investors looking at short-term wins.

By securing short-term projects with significant payback potential, leaders can create cost savings and clear progress towards sustainability goals. The benefits of these short-term projects, like reducing energy consumption, define the foundations for a long-term transition. 

Sustainability has become a critical part of business activities. 

Sustainable leaders must define the key elements of the role, prioritise collaboration, be transparent and balance both short and long-term goals. It’s up to sustainable business leaders to motivate and drive their organisations to make a positive impact.

The energy industry transition towards cleaner alternatives is happening at full pace, and this transformation highlights the need to effectively manage power distribution efficiently. Embracing new technologies that support a business achieve these changes is an opportunity to create added value. When exploring a digital strategy, most businesses prioritise improving efficiency and reducing costs, followed by creating new services and strengthening customer relationships.

Adapting and integrating new solutions

New legislation like the US Inflation Reduction Act focuses on driving businesses towards renewable energy sources. The movement to this new phase of renewables is challenging. Adopting AI and digital technologies will enhance grid stability, reduce costs and enhance sustainability in this new phase of transformation. AI-powered grid systems support leadership in integrating renewable energy in various ways, providing real-time data analytics, fault detection, optimised energy distribution and more. AI and other emerging technologies will be vital to transform the renewable energy industry. Aside from the environmental responsibility aspect, embracing these technologies and the opportunities creates a competitive edge for companies in the renewable energy market.

When determining what technologies to integrate, C-Suite executives must consider their business and decide what best fits their requirements. Factors such as cost savings and difficulty of implementing and onboarding stakeholders will play a role in deciding on the best solutions.

While the benefits and opportunities of AI and other digital tech are clear, preparing employees and stakeholders to integrate these technologies can be challenging. Securing buy-in for digital transformation efforts typically requires a cultural shift within a business. Some employees may resist change to new processes or be cautious of how some solutions will affect their role. 

For this reason, it’s critical that business leadership demonstrate the solutions to their workforce, show their commitment to innovation and embrace new technologies. This level of commitment must be displayed throughout the C-Suite and beyond, eliminating silos within an organisation and supporting broader collaboration. This approach enables the sharing of ideas and expertise, and the collaborative approach leads to more innovation and solutions. C-Suite should look to acknowledge and reward employees contributing to these projects, as recognition will strengthen motivation and inspire other employees to participate.

Risk Management

Renewable energy production continues to rise as the previous challenge of costs declines, yet there are still questions and risks concerning intermittency and some regulatory and market barriers. Inconsistent or outdated regulations could slow the growth of this new phase of renewable energy development. Creating innovative renewable technologies will require considerable research and development. C-Suite leaders need to support the collaboration between research groups, private businesses and government agencies to enable technology progress and strengthen knowledge sharing.

Business leaders in the energy industry can improve public awareness of the benefits of renewable energy through education and clear communication. Involving local communities in decisions and consultations is essential. 

Tackling climate change and transition towards a clean energy future will require international collaboration and alignment of our strategies. C-Suite will play a vital role in creating partnerships that promote sustainable energy solutions. By embracing and rewarding innovation, training and upskilling, C-Suite leaders can provide the necessary support to enable a transition towards clean energy solutions.

 

EY identified the transformational CSOs as agents of change and those more likely to convert climate plans into action. In the last few years, the responsibilities of the Chief Sustainability Officer (CSO) have shifted from the corporate background to the core of business strategy. Amy Brachio, the Global Vice Chair of Sustainability at EY, believes that CSO must be strategically positioned in a company and empowered to hold other business leaders accountable.

The role of the CSO has progressed into one that is much more strategic, shifting from corporate social responsibility plans to definitive sustainable value creation. The transition highlights the increasing importance of sustainability in an organisation beyond regulation and compliance. Brachio explains in the 2023 EY Sustainable Value Study that CSOs focus on determining the sustainability issues that significantly impact financial performance and risk.

The report suggests, however, that CSOs in sustainably dedicated companies are challenged, due to the slow rate of progress on climate action and lack of collaboration between other teams. These factors are impacting the level of satisfaction for CSOs. EY data suggests only 17% of CSOs are very satisfied in their positions, and 42% stated they lack commitment to staying with their employer.

As we continue embracing economic and geopolitical challenges, business progress on climate action has slowed. CSOs are securing less spending but experiencing rising pressure from C-Suite leaders for short-term measures and results. The EY study of CSOs reported an average decline in emissions of 20%, down from 30% in a report of last year, along with a declining number of actions companies are taking associated with climate change to 4, from a previous average of 10. This year, only 34% stated that their business intends to increase spending to tackle climate change in the year ahead, compared to 61% in the previous year. Brachio highlights that considering the geopolitical tensions, sustainability leaders are experiencing significant challenges with resource allocation. Their role becomes even more complex, considering that 46% state they lack the authority to hold C-Suite associates accountable for their performance on sustainability plans, and this is where the transformational CSO comes into play.

The EY report suggests that the transformational CSO can translate climate commitments into action. Businesses with transformational CSOs are typically more committed to climate impact reductions, with over 50% expecting to increase investment over the next year and increase emission reductions. A transformational CSO is more satisfied and less likely to leave their role.
What defines a transformational CSO?

EY research suggests that an individual’s background is selected to lead a sustainability agenda, and how they move into this role significantly influences their ability to have a positive impact. EY describes this individual as a leader who can influence, negotiate and is capable of listening. Transformational CSOs can drive change at scale and play a critical role in defining strategy and actively engaging with shareholders, investors and customers.

Dr Lutz Hegemann, the President of Global Health & Sustainability at Novartis, explains that you need an individual with a strong business understanding, rather than creating a sustainability strategy and a business strategy, you want a sustainable business plan. It’s not just about having a CSO with the necessary background. It’s also about how a CSO is empowered by the C-Suite to move forward with the plan.
As sustainability leaders play an increasingly critical role in managing the challenges of shifting to climate action, Brachio believes it imperative to

We have reached a time when businesses must adapt and reinvent themselves for progression and success. Companies must prioritise their contribution to people and our planet. This connection to society is critical to people, employees, investors, partners and clients. 

With climate challenges becoming a dominant force, sustainability has become the competitive edge for businesses today. Businesses must adapt and reinvent their business model and ensure sustainability is a core strategy. Those businesses that are leading this movement are demonstrating the way that sustainability has created a competitive edge over other companies.

How can businesses reinvent their business model?

The purpose of your business

Defining your purpose as a business and interpreting the contribution to people and the planet is a priority.

Adapting Performance

Today, measuring the performance of a business goes beyond profit generation. The performance also aligns with the impact on people and our environment. For many companies, sustainability is integrated heavily into their business strategy rather than having a separate sustainability and business plan. The transformation strategy becomes focused on transitioning a business into a sustainable business.

Collaborating with the team and stakeholders

Engaging with employees and partners is critical to motivate and enable this transformation in an organisation. Employees will drive the process, and a business must ensure they contribute to adapting and defining future strategies. 

A  new stage of governance

Many industry experts have begun a new phase of governance, and that success hinges on delivering a more collaborative and inclusive governance, which prioritises diversity of gender, ethnicity, background and those with experience in sustainability.

Prioritise sustainability as a competitive driver

Businesses shouldn’t consider sustainability as a process of compliance. It’s more about creating a competitive edge and defining how to embed sustainability into your organisation, deliver more success and appeal to other potential partners and investors.

Meeting future standards is vital

New regulations and reporting standards like the ones introduced by the International Sustainability Standards Board drive c-suite and executive leaders to prioritise sustainability across their entire organisation. 

A sense of purpose and clear support for sustainability is accelerating, so we must prepare to implement the necessary measures to remain competitive. Whatever sector, the importance of sustainability is growing, and companies must decide whether to create their path towards a positive future. 

The UK and Germany have enhanced their partnership in science, research and innovation with new and creative plans. In a recent meeting, the UK Science Minister Michelle Donelan and German representative Bettina Stark-Watzinger formed a joint declaration committing both nations to strengthening their science and technology partnerships.

The plan includes creating a dedicated task force to ensure ambitious plans are converted into structured projects in emerging and critical industries like clean energy, AI and security. To drive the partnership forward, the UK is allocating part of the International Science Partnerships Fund to support collaborative projects between Germany and the UK. Other groups, including the British Academy and the German-based Alexander Von Humboldtz Foundation, are contributing over the next few years to support the younger generation in their education pathways.

Donelan explains that by supporting the next generation and ensuring leading organisations work together, we can strengthen the opportunities to deliver new jobs and build businesses. Stark-Watzinger highlighted the necessity for Germany and the UK to take action, explaining that with our current challenges, it’s critical that both nations work together and focus on delivering joint research solutions.
These challenges include the climate crisis and energy security to emerging technologies, like artificial intelligence.

By combining resources, talent and experience, the UK and Germany hope they can accelerate developments to enable both nations to tackle these challenges. While there are some concerns regarding a possible refocus of priorities impacting domestic research plans, the hope is the agreement will strengthen the entire research ecosystem.

The latest announcement comes after a number of agreements between Germany and the UK. Last year, both countries confirmed a partnership to accelerate the deployment of low-carbon hydrogen technologies. This agreement intends to create a leading hydrogen market, generate new jobs and support additional investment in the low-carbon industry. The plan consists of five collaborative measures, including accelerating hydrogen projects, creating a leadership stance on hydrogen markets and supporting trade in hydrogen-based goods, technologies and services.

Further partnerships include the agreement between Imperial College London and Technical University Munich, launching the Imperial-TUM Zero Pollution Advanced Fund, and strengthening research plans in the clean tech industry.

A quarter of renewable energy professionals worldwide have secured a significant pay rise in the last year, as the industry focused on reducing talent from leaving the market to pursue other opportunities in technology or fossil fuels, as their skills continue to be in more demand.

The latest Global Energy Talent Index (GETI) explored the opinions of 12,000 energy industry professionals and discovered that an increasing green skills gap is putting individuals with renewable energy experience in even more demand. The study found that just over 50% of low-carbon energy professionals secured a pay rise last year, and 24% of the workforce stated that the increase exceeded 5%. The increases were recorded as more significant and frequent for engineers and hiring managers.

Confidence in salary was also high in the report despite the current economic challenges, with over 65% of clean energy professionals expecting a pay rise before the end of the year. For a large majority, the average pay remains the highest in North America for contract-based positions and in Australasia for in-house professionals. The report believes this trend in salary increases is partly the requirement for pay to maintain pace with rising inflation and interest rates and with businesses focusing on retaining and supporting employees during economic challenges. The other influential factor is the increased competition for green talent.

Over 30% of clean energy professionals stated they had been headhunted six or more times in the last year, and 40% said they were open to moving to another energy market. The power market was considered the most popular for a possible move, but 40% stated they would be willing to work in the oil and gas industry.

Transforming markets with digital technology

The study discovered that technology is considered the top industry of choice for a career change for clean energy professionals. Over 30% of respondents said they would consider moving to a technology business. The report explains that the digitalisation of renewables is creating an overlap of skills with the technology market, including rapidly emerging skills associated with artificial intelligence (AI). Over 33% of renewable energy professionals use AI often at work, with adoption levels higher than in other energy markets. A further 13% intend to adopt AI technologies this year.

The most popular application of AI in renewables is the automation of project management processes, like staff collaboration. Many companies are utilising data analytics to strengthen energy production and energy efficiency. Many respondents in the study stated that they consider AI adoption as beneficial for their skills and career development. 60% believe AI will improve career progression and think AI will be a critical supportive tool at work rather than a replacement for human capabilities.

The renewables industry welcomes the benefits of AI, with many businesses enhancing performance and inspiring others to follow a similar path. In a rapidly evolving sector, individuals are actively exploring new technologies to enable further progression and improve their work-life balance. Renewable energy businesses will need to stay connected with AI to retain talent. 

Climate change is influencing the rate of development of leadership roles in the green industry. The rising demand for renewable energy talent, especially at the senior level, is increasing considerably. R&D and technology professionals in battery and storage systems, digitalisation in renewables, and data analytics are high-demand markets. Businesses are carefully considering the effects of climate change while developing their strategies. As more firms focus on a green future, how is the role of the future leader transforming?

Climate change and sustainability have evolved into top priorities for business leaders worldwide. Climate change has influenced discussions and strategies concerning the energy transition and the movement towards a green future. Environmental, social and corporate governance (ESG) processes are now critical skills for today’s leaders. Sustainability positions are, as a result, evolving rapidly. 

Chief sustainability officers, ESG officers, CSR leaders and experts in sustainable supply chain and operations must adapt to cultural change, create long-term solutions and ensure the organisation’s sustainability. Added to the rising demand for renewables, electric vehicles (EVs), green finance and sustainable management, industry analysts anticipate a considerable rise in demand for sustainable leadership throughout 2024.

At the core of the green industry are several significant markets – the major power producers (solar, wind, biomass and hydro), the EV manufacturers, battery storage systems, electrolyser manufacturing and green hydrogen. At the leadership level, businesses are actively seeking renewable energy talent, especially at the senior level. Candidates with a strong skillset in EPC, business development, engineering and design, and expertise in renewable energy policies are in increasing demand. These leadership roles require a strong understanding of the renewables market, knowledge of financial models, project management and commissioning.

The requirements for green leadership roles vary between industries. Whether it’s renewable energy in utilities, supply chain sustainability or ESG integration in finance, green leaders must adapt to the differing challenges while maintaining a focus on sustainability. This approach ensures that a business remains agile, focusing on environmental and social responsibility while meeting the demands of industry and stakeholders.

Other industry leaders believe there is a rising demand for R&D and technology leaders in battery and storage, material sciences, with a chemistry background. Another market gaining momentum is the digitalisation of the renewables industry. Solar and wind are becoming more connected, and data and analytics are more common and vital in this market. 

Senior leaders in technology, cloud platforms, data science and security will be in higher demand as more leadership roles develop within the industry. Green hydrogen and ammonia production will likely be a significant market in the next few years. These sectors will need senior leaders in manufacturing, project management, supply chain and professionals in material sciences and chemical processes.

According to industry experts, success and progress in these positions will depend on a combination of sustainability knowledge, strategic thinking, data expertise, innovation, agility and communication skills. Furthermore, supply chain management skills, an understanding of the circular economy and strong stakeholder management are critical for driving sustainability goals.

One of the core challenges for the future is the availability of talent with the necessary experience in some specific areas, like solar manufacturing, R&D in battery systems and electrolyser manufacturing. 

 

Recent reports suggest the importance of female business leaders in driving higher levels of success and how elevated sustainability roles have opened opportunities to the C-Suite for women. 

Numerous studies indicate that having more women in leadership roles is the best way for a business to increase profits, continue innovating and achieve climate and sustainability goals. Despite this finding, the latest Global Gender Gap report from the World Economic Forum suggests that only a little over 30% of senior leadership roles are held by women. While there’s been progress, the rate of change is slow, but the increased attention on sustainability is helping create a new wave of women moving towards the C-Suite. 

The rise of the CSO role has considerably impacted the key elements of the C-Suite in the last few years and gender imbalance – as more businesses prioritise the sustainability leader role, which is often taken by women.

Sustainability as a path to leadership 

Until recently, the role of a sustainability leader was often excluded from key decision-making, but today is as critical to shaping the plans of an organisation. Studies from Climate Impact Partners in 2023 discovered that 43% of Fortune 500 companies have a CSO or equivalent. In 2020, this figure stood at only 19%. CSOs are now operating at the C-Suite level and in direct line with the CEO. As a path towards leadership, sustainability enables more women to progress quicker than in other business areas. It’s positive to see more women in the C-Suite and while no definitive path exists between a CSO and CEO, this will likely evolve as sustainability becomes increasingly synonymous with business success.

When observing the C-Suite, female representation is only 25% on average, compared to 46% for entry-level positions. More women in senior leadership roles, like CSOs, is significant progress.

The movement towards sustainability and social responsibility drives change in female leadership and diversity. There are several reasons why this change in corporate values may create more opportunities for women in leadership roles. Many women move towards companies that align with their values, especially those associated with sustainability and social responsibility. As businesses prioritise these values, they become more appealing to female talent, creating a more diverse leadership group focusing on inclusivity.

Furthermore, prioritising sustainability typically requires a change in corporate culture towards long-term success. This shift facilitates the need for varied leadership styles and the opportunity for women to participate. Businesses focusing on sustainability are more likely to embrace diverse leadership as it corresponds closely with the approach required for driving sustainability plans.

As the importance of ESG continues to grow and sustainability becomes embedded into the core of company strategy and culture, there will likely be a rise of women to senior leadership roles. This movement requires businesses to recognise the significance of diversity and actively show this through committed actions.

While the position of CSO provides a possible pathway to the C-Suite for more women, similar routes must emerge in other leadership roles. Creating opportunities to offer mentorship and advocating for women and diverse voices is vital to enhancing this pathway. The increased emphasis on ESG and DEI highlights the need for more empathetic leadership. Women often show strong interpersonal skills and emotional intelligence, putting them in a position to thrive in leadership roles that need someone to understand and manage diverse stakeholder requirements.

To conclude, the changing landscape that prioritises empathy in leadership corresponds with the many qualities female leaders have. This movement creates an opportunity for women to support further strategies for ESG and DEI and rise to leadership positions where their empathetic leadership style can facilitate positive changes.