Sustainability is the new legacy for CEOs
Sustainability is the new legacy for CEOs
President Barack Obama is building his green legacy, including a recently announced joint agreement with China to reduce carbon emissions. In this year’s State of the Union address, Obama remarked on climate change and his sustainability legacy. Obama said, “No challenge — no challenge — poses a greater threat to future generations than climate change.”
I am reminded of comments from Leah Seligmann, NRG’s first chief sustainability officer (CSO), in my Talent Show article about the evolving role of the CSO. Seligmann said, “The right CSO plays a key role in helping the CEO define the legacy for the company. Other company leaders play critical roles too, but I think the CSO helps create that long-term vision and rally the troops toward that vision.”
How have CEOs thought about their legacy, especially in relation to sustainability?
A historic look at CEO legacy
In the past, the CEO’s legacy was the company founded or the philanthropic institute created. For example, Interface’s Ray Anderson left a legacy of cleaning up an industry that long had been a heavy polluter.
Several companies have been in the family for generations and generations: SC Johnson, Ford Motor Co., Levi Strauss & Co., Koch Industries and Tata Group, where the company itself is the legacy and the grandchildren still hold leadership roles.
With family-founded philanthropic institutions such as the Bill & Melinda Gates Foundation, the MacArthur Foundation and the Rockefeller Foundation, the legacy was the organization created and named after that CEO.Some, such as Anderson, felt the calling and a tug to create a better future for their grandchildren.
In the Weinreb Group’s 2013 Pioneers of Sustainability report (PDF), Anderson’s former colleague Jim Hartzfeld said, “Saving the boss money can only get you so cranked up. But layer on top of that a big and audacious purpose of trying to reinvent commerce so that the world can be as we wish it to be for our kids and grandkids. And infuse that with basic education around ecoliteracy and how nature works, [and] we started finding additional savings that exceeded all of our expectations and that the laws of diminishing marginal returns were just completely violated.”
Legacy now vs. then
Stephen Howard, CEO of Business in the Community UK, said of the challenges of creating a lasting legacy in this rapidly shifting world, “The truth is modern chief executives have a relatively short time to make an impact and create transformational change within a business. That is why considering a long-term legacy should be at the forefront of how modern business leaders operate. ... Success as a leader has changed. Sustainability is a long game and it is those leaders who understand this whose businesses will be profitable, survive and thrive, while also having a positive impact on people and planet — and this is surely the ultimate legacy.”
In this present time, CEOs attend the World Economic Forum at Davos and the Clinton Global Initiative. At these meetings they are connecting with heads of state, Nobel laureates, heads of foundations and NGOs as well as other CEOs. They experience the world’s toughest challenges and consider what role their company has to play in tackling and managing the challenges.
And while they wear their CEO hats, they also consider their personal legacies.
Will future generations remember Bill Gates as a co-founder of Microsoft or as a philanthropist who speaks at Clinton Global Initiative meetings?
Personal vs. company legacy
In PwC's 17th Annual Global CEO Survey, 40 percent of CEOs said that the one thing they wanted to be remembered for, as CEO of their enterprise, was creating "social value" or "value for others." What about the other 60 percent? According to the Conference Board’s research on CEO succession, the average tenure of a CEO is 9.7 years. That seems like a relatively short time to create legacy.
A founding CEO certainly has rights to create the legacy for the company he or she founded. I am not sure the CEO who is there for just 9.7 years in between other CEOs in a long line of CEOs feels he or she has the privilege to create a legacy for future CEOs to uphold. Yet at the same time, the CEO recognizes the need to act responsibly and ensure the future of that company.
What is your CEO doing about his or her legacy?
While addressing the future of sustainable business at the 2014 Annual Lecture at London’s Imperial College Grantham Institute for Climate Change, Paul Polman, CEO of Unilever, commented, “We must recognize the beginning of the end of the high carbon era and the birth of a new kind of economy: An economy in which the new businesses of the future, and the forward-thinking ones from the past, will come together to create a new industrial landscape, a new prosperity and a better future for us all."
The time is now and the opportunity exists for CEOs to tie sustainability into their company and their personal legacy. CSOs have the opportunity to help the CEO create that legacy and carry it through.
I’m leading a Breakfast Roundtable on the CEO’s legacy Feb. 19 at the 2015 GreenBiz Forum. I hope you’ll join me there.