It is important for organisations to consider how ESG helps the enterprise. The measurement of ethical behaviour, drives the creation of short- and medium-term metrics that are explicitly linked to long-term vision and strategy for value creation.

 

These are considerations beyond just shareholder value and market share.  In this process, it is crucially important for ESG leaders to be ethical leaders not only to form an important regulatory standard but also to facilitate integrated management across different functional departments to consider the relationships between ESG and financial performance when making decisions. 

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ETHICS IS A TIMELESS CONCEPT

 

Adam Smith, the father of modern economics and a moral philosopher, wrote a great deal about ethics.  “People stand always in need of each other”, “businesses desire to do good partly to gain approval and be known as good, and partly out of self-interest” and so forth."

 

Regardless whichever motive is paramount, the purpose of business is still to create value by serving the needs of people.   There are numerous educators, economists and market leaders sharing the sentiment of ethics as a future proof system.

 

ETHICAL BEHAVIOUR BY LEADERS

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Being ethical is a powerful way to create value because this creates trust, trust builds strong relationships, and out of relationships comes value.

 

ESG issues are in a wide spectrum; we cannot rely on one person for solution and value creation.  The leader therefore has two tasks (1) be behave ethically (2) to persuade others to behave ethically.

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ETHICAL VALUE CHAIN

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Establishing the ethical position, communicating values and standards, motivating others, monitoring ethical performance and ensuring continuity are the engine room that powers the ESG value creation

 

And so, mobilising people instilling trust and creating a culture of ethics at the heart of organisation is key.

 

IMPORTANT ACTIONS

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1.  Integration operationalised:

 

• Need actions of integrated business management as ESG is a cross-departmental issue

• Calls for an understanding of differences functionally and culturally

• System thinking to build symbiotic relationship and bring forth commonality with empathy and respect

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2.  Communication for resonance:

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• Build shared understanding and vision of a common future

• Create a new way to connect business with society and align our world views

• Craft our voice of 4Ps:  People, Planet, Purpose and Principle

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3.  Promote intrinsic desire:

 

• Not just cognitive strength but strengthen affective domain to drive essential soft skills for leadership

• Head and heart to go hand in hand

• Set clear targets and goals; transform mindset to initiative changes effectively

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NEW MINDSET AND SKILLSET FOR A NEW ERA

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There are many fluid skills that will fade as the market changes but lateral skills for leadership is transformational.  We need to continue our professional development in  both technical skills and humanistic soft skills to progress with the market and the world.

 

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Source:  Extract from APlus Magazine article, by Jannie Tam, GROWDynamics​

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Tags:   ESG    /  Integrated management   /   Sustainability   /   Leadership / Business Ethics

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