Sustainability leadership within financial institutions
Last week I was invited to speak at the Finance for a Sustainable Future conference on the topic of being a sustainability leader in finance. It was fascinating to synthesise what we’re learning from the Lab’s community of systemic intrapreneurs about what it takes to influence meaningful change within an institution. Here are the three qualities and six strategies I found myself sharing:
1. A sustainability leader is more than a role
In a financial system which must fundamentally reorient itself toward a just transition to a low carbon economy, every role is a sustainability role within a bank. It’s not just the job of the Sustainability or CSR team. In fact, without a network of allies throughout their institution, the subject matter expertise that these teams bring will struggle to embed sustainability across every area of core business. Banks also need: risk managers willing to challenge traditional risk modelling approaches and incorporate new forms of data over longer time horizons; colleagues in the legal team with the knowledge and willingness to structure contracts and deals differently; and champions in the CEO’s office and corporate strategy team who are willing to bring sustainability issues to the table and create the permission for it to embed throughout the organisation. Sustainability leaders must exist in the front office, back office and every role in between.
2. A sustainability leader transforms more than just products
The world is not going to become more sustainable through the development of new green finance products if the rest of an institution’s products and services remain unchanged. For a financial institution to be part of a just transition to a low carbon economy, all products and services, business operations and organisational culture must be transformed. Business operations include governance, incentives, policies, decision making processes and risk frameworks. Transforming culture involves changing mindsets, values, narratives, norms and relationships. This work requires every employee to ask what they can do within their own day job to embed sustainability in the heart of business as usual.
3. A sustainability leader is more than just words
Too often there is a gap between the role a financial institution says it intends to play in the world and what plays out in reality. The role of a sustainability leader is to diagnose the gap between that desired future and the sometimes difficult-to-acknowledge reality of how things are right now – and then identify ways to close it. When financial institutions draw attention to new purpose statements or green finance products but don’t apply this lens to the rest of their activities, our collective transition to a more sustainable financial system is hampered. Not one of the finance professionals I’ve met actually want this outcome. Sustainability leaders must use storytelling, relationship and influencing skills to enable these deeper shifts within their institution.
But how to embrace the role of sustainability leader effectively? Here are some of the key tools and tactics members of our systemic intrapreneur network have found helpful:
- Focus on the human – In all conversations, focus on the person you’re connecting with, not their role. What are their drivers? What do they care about? What do they value as a person behind their job title? Ask them about the world they want for the next generation.
- Identify patterns – No single person will ever change a whole institution on their own, but small nudges at the right time can lead to big shifts. Look for windows of opportunity to strategically nudge the system and learn from how it responds.
- Be a boundary-spanner – Build relationships across silos within the institution and with people beyond organisational boundaries. This will help you bring in the right perspectives at the right time to move things forward.
- Do your inner work – Our ability to change a system depends on our willingness to change ourselves. Create space for reflection and engage with the way you honestly feel about our climate emergency. Can you transform this into meaningful action?
- Learn the art of job crafting – Start to build a reputation for yourself as the go-to person in your institution on a sustainability-related topic. Look for opportunities to advocate for this expertise to move from side-of-desk and into your job description.
- Lead beyond authority – Look for ways to influence change beyond your formal job description. Identify allies who can help spread your message and build relationships with influential sponsors who share your values.
- Identify champions – Identify people in formal and informal positions of influence who can advocate for you and create institutional permission for the change you seek.
- Find your tribe – Leading positive change can feel exhausting and isolating. Surround yourself with likeminded peers for mutual support and learning, both within and beyond your organisation.
Sustainability leadership isn’t a position; it’s a way of working. It’s about navigating a web of relationships to help an entire institution reorient itself around new goals and structure itself to deliver on them. To enable a just transition to a low carbon economy, every finance professional must explore the opportunities within their own day job to enable this organisational transformation. If you are employed by a financial institution, then you are a sustainability leader if you choose to show up to work this way.
To join a community of finance professionals transforming their institutions from the inside, sign up to join our Lab Community here and indicate your interest in the Finance Matters network for intrapreneurs. Or, reach out me directly at firstname.lastname@example.org.