The environmental, economic and social challenges that European managers, professionals and policy-makers currently have to face are characterized by their multi-dimensionality, interconnectedness and urgency. Even though these volatile, uncertain, complex and ambiguous (VUCA) contemporary issues are recognised by senior leaders, as the Global Risks Report 2019 has illustrated, the current paradigm in management education and business practice continues to be centered solely around shareholder value. It is therefore important to develop a European model of sustainable leadership and management. The EU’s commitment to the Sustainable Development Goals, the implementation of the Paris agreement and various other European Commission and social dialogue objectives call to action at operational levels, including in the workplace.
When referring to sustainability, the environmental, social and economic dimensions are often differentiated. However, there is also a procedural component delivering materially on these issues. As the concept of environment, social and governance (ESG) highlights, an emphasis is also to be put on how companies evolve towards a business model that suits more than financial interests. A change in the governance / management model of companies is therefore key to making concrete progress towards a sustainable socio-economic model.
A scattered sustainability management landscape
Today, only few companies have a unified sustainability strategy and even fewer have followed-up with actions, according to a McKinsey survey. Sustainability concerns remain often a departmentalized concern within companies and are only seldom integrated to core business functions such as strategy and R&D development. Generalising sustainability issues into corporate life may not only lead to better ESG performance, but can also have a positive financial impact on these companies.
Besides the limited implementation of sustainability strategies and measures, those existing tend to follow an incremenatalist logic. That is to say, measurements of sustainability progress (as laid down in non-financial reports) of a company only compares year-to-year data and does not align to broader goals or policy frameworks. Since ESG measures remain often restricted to sustainability departments and since the context and longevity of sustainability measures are often left aside, the systemic logic of change towards a more sustainable economic system may have been neglected.
In conjunction with the notion of ESG, Corporate Social Responsibility (CSR) has been guiding efforts to re-orient business operations and have also been reflected in the European Commission strategy on CRS for 2011-2014. Taking into account the accelerating environmental challenges and the “nice to have” connotation of CSR, and considering the links between the sustainability dimensions, the idea of a “triple bottom line” (TBL) of companies emerged. By measuring and valuing various types of assets (economic, social, environmental), an improvement in the performance on all three sustainability dimensions is possible. Developing management skills to deliver on that triple bottom line may thus help to improve key sustainability performance measures. To ensure that, CEC calls for better managerial continuous education by integrating sustainability actively in the curricula.