Walking the walk on sustainability

The importance of sustainability is at an all-time high, with global crises such as climate change and social inequality continuing to worsen. Consequently, the role of asset managers in driving sustainable investments and influencing real-world change has become paramount. 

To cultivate transformation, asset managers must embody certain characteristics of sustainability leaders, such as honesty and transparency, personal resilience and courage, collaboration, and compassionate leadership. In addition, recent research has shown that women are advancing in sustainability at a faster rate than in other business areas. 

This blog will explore the required characteristics of sustainability leaders, the reasons behind the rapid advancement of women in this field, and how asset managers can develop these qualities to maximise their influence.

Honesty and transparency

Sustainability leaders need to embrace honesty and transparency in their decision-making processes and communication. This involves being forthright about their intentions and actions, as well as openly acknowledging any shortcomings or failures. By being transparent, asset managers can build trust with stakeholders and ensure that their actions align with their values, facilitating better decision-making and more sustainable outcomes. A study by GRI and Globescan (2020) highlights that transparency is key to building trust with stakeholders, which is essential for driving sustainable investment practices.

Personal resilience and courage

The ever-changing landscape of sustainability requires leaders to possess personal resilience and courage. Asset managers must be adaptable and open to change, as well as willing to take calculated risks in pursuit of long-term goals. By demonstrating resilience, sustainability leaders can better navigate the complex world of sustainable investing and cultivate meaningful change. A report by the World Economic Forum (2018) emphasises that resilience is crucial for leaders in an uncertain global context, enabling them to respond effectively to unforeseen challenges.

Collaboration

Asset managers cannot bring about transformative change in isolation. Collaboration with other organisations, investors, and stakeholders is essential for driving sustainable outcomes. By fostering relationships and engaging in dialogue, sustainability leaders can pool resources, share knowledge, and develop innovative solutions to global problems. The World Business Council for Sustainable Development (WBCSD) highlights in their report “Collaboration: Transforming the way business works” (2016) that collaboration is crucial for driving sustainable development, as it enables businesses to tackle systemic issues more effectively and achieve collective goals.

Compassionate leadership

In addition to honesty, resilience, and collaboration, sustainability leaders must foster the right conditions and inspire those around them through compassionate leadership. Compassionate leaders are empathetic and understanding, prioritising the well-being and needs of their team members. 

By demonstrating compassion, asset managers can create an inclusive and supportive work environment, encouraging employees to strive for excellence and engage in meaningful work. A study by Harvard Business Review (2017) found that compassionate leadership can lead to increased employee engagement, loyalty, and productivity, all of which are crucial for driving sustainable change.

Monitoring complex frameworks

Sustainability leaders must be able to continually monitor complex frameworks, ensuring that their investments align with global standards and expectations. Asset managers should be well-versed in frameworks such as the United Nations Sustainable Development Goals, the Task Force on Climate-related Financial Disclosures (TCFD), and the Principles for Responsible Investment (PRI). By staying informed and engaging with these frameworks, sustainability leaders can better understand the implications of their decisions and drive more impactful change.

The advancement of women in sustainability leadership

Research indicates that women are advancing in sustainability leadership at a faster rate than in other business areas. A report by McKinsey & Company (2020) found that women hold 24% of senior leadership positions in sustainability, compared to only 17% in the broader C-suite. This trend may be attributed to several factors, such as women’s innate collaborative skills and their ability to navigate complex situations. A study by the American Psychological Association (APA) found that women generally demonstrate better interpersonal skills, including collaboration and communication, which can be advantageous in driving sustainability initiatives (Eagly, 2013). 

Additionally, the growing importance of sustainability in business may be attracting more women to this field, as they are often more concerned with social and environmental issues than their male counterparts. Read more about gender diversity in senior leadership here.

To maximise their influence in enacting real-world change, asset managers must develop the essential characteristics of sustainability leaders: honesty and transparency, personal resilience and courage, collaboration, and the ability to continually monitor complex frameworks. By embodying these traits, asset managers can drive sustainable investments and cultivate transformational change.

The rapid advancement of women in sustainability leadership presents an opportunity to further promote these qualities and capitalise on diverse perspectives to tackle global challenges.

 

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