Sustainability decision-maker, you are doing a good job. But is it enough?

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Sustainability is high on the agenda almost everywhere, but the system change is faltering. The call for leadership that converts intention into measurable movement is growing. 'High time for the Future Fit Accelerator'.

Dutch directors give their own organization an average of 6.6 on sustainability. The Netherlands as a whole gets a 5.5. At first glance, this difference may seem logical: everyone knows their own efforts better than those of the system as a whole. But that is exactly where the discomfort lies.

Rob van Tulder, emeritus professor at Erasmus University, calls this the intention-realisation gap: the gap between what organisations want to achieve and what they actually achieve. According to him, there is also a common human mechanism behind this: overplacement. 'Overplacement is one of the most common cognitive biases among leaders. They sincerely believe that they are performing better than they actually do and that belief makes them less receptive to the signals that prove the opposite or less inclined to take the more painful measures.'

Not always in the performance culture
In recent years, sustainability has shifted from a reputation issue to a strategic core theme. It touches on financing, legislation, talent, energy security, chain risks, innovation and competitiveness. No director can afford to treat sustainability only as a communication theme.

Karen Maas, professor and scientific director of Impact Centre Erasmus, summarizes this tension concisely: 'We see that sustainability is a topic in the boardroom. But as soon as you ask who is being judged on the results, it becomes quiet. Intent without accountability is not a strategy. That's a wish list.'

Welcome to the Future-Fit gap. Organizations move, but often still within the logic of the existing system. They reduce emissions, make procurement more sustainable, improve reporting and set up programs. That is necessary. But don't automatically initiate a transition.

The low-hanging fruit has been picked
For many companies, the first steps have been relatively clear: saving energy, reducing waste, making mobility more sustainable, mapping CO2, reporting according to new standards.

But the real tension arises in places where sustainability clashes with the revenue model, with investment choices, with customer expectations or with chain agreements. There it becomes clear whether sustainability is really strategic.

Future-fit leadership therefore requires four shifts.

1. From optimization to transformation.
   Not only making existing processes more efficient, but daring to investigate whether the business model itself is future-proof.
2. From internal goals to system impact.
   Not just managing your own organization, but understanding the role you play in chains, sectors and ecosystems.
3. From intention to accountability.
   Not just formulating ambitions, but embedding sustainable impact in decision-making, governance, remuneration and performance agreements.
4. From individual frontrunners to coalitions of change agents.
   Not making one sustainability manager responsible, but building teams that can drive change in strategy, finance, HR, commerce, operations and innovation.

It is precisely this last shift that is crucial, says Nicolette Loonen of sustainability consultant TOSCA. 'The transition will not be accelerated by one department that will work harder. It asks people in several places in the organization who speak the same language, feel the same urgency and know in their own domain what choices are needed'.

This requires a different type of leadership, says colleague Ulrike de Jong. 'Not just substantive knowledge about sustainability, but the power to change. Not only being able to report, but being able to influence. Not only knowing what the impact is, but also how to get colleagues, customers, suppliers and partners on board'.

From progress to system change
Organizations that really accelerate are looking beyond their own sustainability report. They don't just ask: how do we reduce our negative impact? But also: how do we change the market in which we operate?

• Fairphone is not only trying to make a more sustainable phone, but is using its own business model to challenge the electronics industry. In area-specific solutions for grid congestion, it appears that the energy transition requires not only technical measures, but new forms of cooperation between companies, governments, grid operators and real estate owners.
• Ørsted shows that an organization with a fossil past can strategically reinvent itself when sustainability is no longer a project, but becomes the core of the business model.
• Philips shows that a company can reinvent itself many times over and – despite clear setbacks – can also stick to a growth strategy aimed at the systemic change that is needed to tackle major social issues.

These kinds of examples show what changes when organizations raise the bar. Not: how are we doing compared to yesterday? But: are we making a demonstrable contribution to the change that is needed?

Loonen puts it this way: 'The question is not: are we doing it right? The question is: are we doing enough to demonstrably contribute to system change? That is a fundamentally different question. And most leaders don't ask it or don't yet'.

This article was written by Change Inc. in collaboration with TOSCA and Impact Centre Erasmus. Click here for the original article.