Company NewsSeptember 20, 2023

Can business executives be mindful leaders on the environment?

When it comes to the complex science of sustainability, most business leaders are outside their comfort zones. Here’s how a business experience platform packed with ESG data and informed by AI can restore their confidence.
Avatar Bernadette Hearne

The concept of “mindful leadership” has been gaining traction since 2010, when Janet Marturano, a former vice president of public responsibility at General Mills, founded the Institute of Mindful Leadership. Since publishing a book on the topic in 2014, publications as diverse as Forbes and Calm Business have urged leaders to be mindful, creating cultures of well-being characterized by compassion, flexibility, authenticity, openness, empathy and self-awareness.

Sounds good. But imagine you’re a business executive schooled in sales techniques, industry dynamics, product engineering and business financials. Armed with that knowledge, you make difficult business decisions as easily as breathing. But does it equip you to make complex scientific commitments about your company’s impact on the environment? Or navigate controversial social issues like gender identity and cancel culture?

This uncomfortable territory is precisely where modern C-level executives are being asked to operate under the microscope of ESG (environmental, social, governance) regulations. Yet, as we have all experienced, venturing well outside the comfort zones of our expertise tends to make us not collaborative and authentic but defensive, reactive and paralyzed with uncertainty.

It’s not a good look . . . or an effective way to run a company. And it’s certainly not the best way to help the world achieve net-zero carbon dioxide (CO2) emissions by 2050.

Climate change’s gap in mindful leadership

In fact, “reactive” and “paralyzed” are good descriptions for a very un-mindful sustainability trend among c-level executives: the growing gap between the environmental commitments they make on behalf of their companies and those companies’ actual achievements.

How big is the gap? While 93% of the 420 Forbes Global companies have committed to achieve net zero by 2050, analyst firm Boston Consulting Group found that, as of February 2022, “just 63% have actually set the kind of interim targets that are critical to reaching that goal. In addition, only 30% of those companies cover all scopes of emissions, including Scope 3,” (emissions generated by their supply chains), in part because many of their small- and medium-size partners can’t supply meaningful data.

Meanwhile, the UN Environment Programme’s “Emissions Gap Report 2022: The Closing Window,” reports “there has been very limited progress in reducing the immense emissions gap for 2030.” In fact, total global CO2 emissions have been increasing since a two-year drop occurred during the stay-at-home COVID pandemic.

If business executives only knew as much about environmental issues as they know about business, they’d be better equipped to make effective sustainability decisions. But how can they get proven science, demonstrable facts and expert advice tailored to the industry specifics of their business in time to move the climate needle by 2030?

As it turns out, they don’t need to pursue degrees in climate science. Their companies’ business experience platforms, given access to the right data and turbo-charged with artificial intelligence (AI), can empower even eco-neophytes to function like experts – across every function and at every level of the organization.

What is mindful leadership?

mindful leadership - Dassault Systemes defines mindful leadership as “the basic human ability to be fully present, aware of where we are and what we’re doing, and not overly reactive or overwhelmed by what’s going on around us.” adds that “when leadership is grounded, it creates a sense of trust and security among teams.”

In a recent Forbes article, members of the Mindful Workplace Alliance, a group of leaders from Fortune 500 companies, reported positive results from practicing mindful leadership. LinkedIn, for instance, experienced an increased in skilled applications from job-seekers; Intel cited improved employee well-being; and SAP reported a 200% rise in ROI, evidenced by improved employee engagement and leadership trust, plus a fall in absenteeism.

But if the gap between corporations’ public commitments on climate change continue to lag their actual performance, the sense of “trust and security” cited by is likely to evaporate. Clearly, leaders who want to be mindful of their sustainability responsibilities need help.

Why is mindful leadership on climate so difficult?

While countless surveys show that most executives are willing to publicly commit to measurable progress on net-zero targets, Monitor Deloitte points out that “leading in uncharted territory can mean placing the wrong bets, making unwise commitments, or investing in the wrong technologies, approaches, supply chains or partners.”

The authors of “Mindful Leadership: Achieving Results by Managing the Mind,” published by the University of Pittsburgh’s Johnson Institute for Responsible Leadership, observe that the lack of mindful leadership that occurs due to this uncertainty is aggravated by “an increasingly complex, ever-changing business landscape” that expects leaders to be “always-on and are often overloaded with information.”

They dubbed this state PAID: “Pressured, Always-on, Information Overloaded, and Distracted.” The antidote, they wrote “is about ensuring that we are doing the right things, as opposed to just [doing] lots of things.”

Easier said than done. “Many senior leaders go through their day not in tune with what they are doing, why they are doing it, and how they and others around them are feeling,” the authors wrote. “They are busy getting a lot done . . . but are they achieving results?”

In the Harvard Business Review article “Overloaded Circuits: Why Smart People Underperform,” researcher Edward Hallowell observed that the pressures of too much information and too little meaning are “turning steady executives into frenzied underachievers.”

How do mindfulness and knowledge complement one another?

If ESG requires more information than ever before, and information overload is the enemy of effective, mindful leadership, then mining all that information for actionable knowledge and insight is one of the keys to success.

Mindfulness starts with being clear on ESG vision and strategy, PwC Global observes in a paper titled “The CEO’s ESG Dilemma.” PwC calls this “finding your true north”: making it “clear the unique value your company create for customers and society.”

On sustainability, PwC outlines four levels of “true north”:

  • Conformist. Companies in this category are focused primarily on ensuring legal and regulatory compliance with the sustainability rules in place in each jurisdiction where they do business. With fast-changing rules that vary greatly from place to place, many companies find it challenging to comply, let alone exceed, the law.
  • Pragmatist. The group recognizes that ESG influences a firm’s performance. “Elements of the corporate strategy need to be assessed frequently, in light of the volatile ESG environment.” Execution is left to individual business units.
  • Strategist. These leaders see ESG as part of the firm’s purpose, so responsibility lies with the board of directors. The board sets ESG KPIs and offers incentives for employees to meet them.
  • Idealist. These executives, who often are founders, see ESG as their company’s purpose. ESG steers the corporate purpose, and ESG KPIs are the only ones that matter.

Defining their company’s sustainability “true north” helps the entire organization understand where the where the company is and where it needs to go. To achieve their goals, however, they must be able to muster information from a wide range of sources, including unprecedented levels of information about the sustainability measures of suppliers, shippers, manufacturing operations and more.

How a business platform integrates mindful leadership with ESG knowledge

To date, most business platforms have been used to manage standard business information, including product designs, manufacturing resources, costs, purchasing and the like.

Adding sustainability considerations to the mix complicates decision-making to the nth degree. While no human can find meaning in all of this information, AI-enabled decision-support systems make it a snap.

For example:

  • AI-enabled business systems can monitor fast-changing ESG regulations, which vary by jurisdiction, then track them against product features, components, materials and parts from suppliers. They can automatically flag mismatches and guide creation of variations for different jurisdictions. By also tracking costs, decision-makers can quickly determine if the product changes can be justified, or if it’s best to abandon the product or the market.
  • Going one step beyond compliance, BCG notes that adding environmental life cycle analysis Science-Based Target Initiative (SBTi) data to the platform enables AI-powered identification of opportunities to decarbonize products. This can involve using different materials, switching to suppliers who manufacture with renewable energy, or working with ones closer to home to reduce the transportation emissions.
  • Adding social measures to the data pool also helps companies avoid suppliers who use underage workers or fail to pay a living wage.
  • Business platforms with collaborative tools built in allow OEMs to coach small suppliers in becoming more “green.” Because OEMs are evaluated not only on their own emissions, but on those of their supply chain (Scope 3), OEMs need to be able to track these emissions and help suppliers nudge them lower. This is critical, BCG suggests, lest “aggressive Scope 3 reductions come at the expense of a just energy transition by prompting companies to shift toward larger suppliers, who are more likely to have the resources to comply.”
  • AI-powered decision-making tools can identify opportunities and risks that might otherwise go undetected. Decisions based on independent, third-part LCA data, combined with your company’s deep industry and proprietary product knowledge, allow designers to “what if” their way to optimized results – and provide the data to document results.
  • Decision dashboards allow C-suite executives and boards to evaluate ESG trends, identify opportunities, and develop/administer incentives to encourage innovation by lines of business, management and front-line employees.
  • Dashboards also provide data for tracking progress against Science-Based Initiatives, identifying shortfalls, and strategizing/executing corrective action. The only way to achieve ESG commitments is to continuously monitor progress, and platforms enable this.
  • Platform-based communities keep all employees informed about ESG vision, strategy, and the tools available to accomplish them. These communities also provide a forum for employees and customers to brainstorm ideas, plan and execute projects, and measure results. Sharing the journey with peers creates a forum to nurture enthusiasm and commitment to shared goals.
  • Collaborative online platform workspaces also support the creation of communities where people in complementary industries can find opportunities to collaborate. For example, McKinsey notes that one company’s waste material could be someone else’s raw stock.
  • Collaborative workspaces also can be used to consult with external ESG experts. Such experts are in high demand; working online allows more companies to tap their expertise more efficiently.

Building loyalty with mindful leadership

Effective action on environmental and social issues is less of a burden when you have a business platform that can quickly point you toward the right actions at the right cost.

By expanding the types of information available in your company’s business platform to include ESG and science-based information, and leveraging AI to deliver actionable insights, leaders can be as confident in their decisions about ESG as they are about business. What’s more, the insights they gain will help them to better explain their strategy and progress to regulators, employees, investors, customers and the general public.

That’s the kind of mindful leadership sure to build loyalty among all stakeholders.


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