The CSRD requires business leaders with ESG expertise, strategic vision and ethical leadership who can drive lasting organisational change, writes Michele Stokes
With the advent of the Corporate Sustainability Reporting Directive (CSRD), large and listed EU-based firms will be required to collect and provide dependable and standardised sustainability data.
This will give stakeholders the opportunity to assess the non-financial performance of companies and evaluate the organisation’s impact on people and the environment. So how will this change the way leaders are recruited?
C-suite executives who understand the importance of sustainable and socially responsible business practices are preparing for the CSRD by formulating environmental, social and governance (ESG) strategies that align with their organisation’s goals.
Executives will need to possess technical knowledge, strategic thinking and a deep understanding of sustainability principles. They will also require considerable organisational change skills.
The future of work
Leaders will need to be adept at navigating this transition and engaging with investors, clients, employees and regulators. The collection and handling of CSRD data presents huge technical and organisational challenges.
Several companies in industries such as oil and gas, food and beverage, manufacturing, and consumer goods are already using ESG reporting and data management software from IT providers.
Process effectiveness will sit across many functions including risk, finance, HR, legal, technology, procurement, supply chain and sustainability. The latter is expected to grow in importance quite substantially.
Leading effectively
We outline below eight competencies that are essential to lead effectively in the area of sustainability:
1. Sustainability expertise – A strong grasp of ESG sustainability concepts and how these relate to an organisation’s operations and business strategy.
2. Technical expertise – Knowledge of best practice for data management and solutions that enhance firms’ ESG performance.
3. Regulatory knowledge – The ability to interpret and implement mandatory and voluntary reporting regulations effectively.
4. Strategic vision – The integration of sustainability goals with corporate strategy, embedding sustainability objectives in the organisation’s long-term vision.
5. Risk management – The identification and mitigation of ESG risks in compliance with sustainability reporting directives.
6. Ethical leadership – Authenticity and ability to inspire and lead cross-functional teams dedicated to sustainability initiatives.
7. Monitoring and reporting performance – Tracking sustainability initiatives through KPIs and incorporating sustainability data within management reports.
8. Financial acumen – Understanding the financial implications of sustainability initiatives and making sound financial decisions related to sustainability investments.
How to recruit for sustainability
According to KPMG, 43 percent of CEOs in Ireland view the greatest challenge in their ESG strategy as attracting new talent. The challenge for executive search firms and HR leaders will be in selecting C-suite executives aligned to their organisation’s commitment to sustainability.
The recruitment process should be rigorous, comprehensive and include each of the following stages:
1. Define role and responsibilities: Responsibilities should include developing and implementing sustainability strategies, assessing risk, ensuring compliance with relevant standards, reporting on corporate social responsibility (CSR) performance, evaluating technology and engaging with stakeholders.
2. Identify key qualifications and skills: Seek candidates with a strong background in sustainability, ESG practices and driving CSR initiatives. They should demonstrate experience in using technology to drive these initiatives efficiently.
3. Prepare a detailed briefing document: Highlight the company's dedication to CSR in the briefing document and throughout the assessment process.
4. Conduct comprehensive competency-based interviews: Assess candidate knowledge of CSR, values and ability to drive sustainable practices. Seek evidence of implementing CSR programmes and their outcomes and ascertain their approach to stakeholder engagement.
5. Evaluate cultural alignment and leadership proficiency: Evaluate the candidate's leadership style for alignment with company culture. Executives should possess the ability to motivate and guide teams towards enduring CSRD objectives.
6. Plan onboarding and integration: Formulate an onboarding strategy that encompasses an introduction to the company's CSR initiatives and organise introductions to key stakeholders.
Role specifications will vary depending on the size, scale and complexity of an organisation. However, a commitment to sustainability and a willingness to adapt are essential for C-suite leaders to effectively navigate compliance with the CSRD and broader sustainability initiatives.
Michele Stokes, is Director and Head of Research at HRM Search Partners
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