Wharton@Work

March 2012 | 

Green Leadership: Driving Sustainability Through the Organization

Green Leadership

German software company SAP is in the business of helping other organizations measure progress and achieve their sustainability goals. But it also practices what it preaches: for the fifth consecutive year, SAP has increased its carbon efficiency, and is on track to achieve its target of reducing emissions to year-2000 levels by 2020. SAP's sustainability initiatives aren't just good for the environment and the company's image, though; they've led to a cumulative cost avoidance of EUR190 million since 2008 and EUR25 million alone in 2011.

"More organizations understand that sustainability isn't a trend," notes Eric Orts, legal studies professor and director of Wharton's Initiative for Global Environmental Leadership (IGEL). "It's not just about following laws or working with environmental groups. Sustainability is now being integrated across the organization; it's an important part of growth strategies. Businesses get it now. They know they need to be at the forefront."

Orts stresses that these efforts to make sustainability a central strategy require leadership. "Many sustainability programs are being led by people from marketing, finance, or operations. Because this is a relatively new function, developing best practices and accumulating knowledge are a challenge. Wharton created the Business Sustainability Leadership program to help them get up to speed and broaden their understanding of the real business issues involved with sustainability. As more companies realize that this is a major competitive issue, they're looking for leaders to drive their efforts.

"Leaders have always needed to be visionaries, but with sustainability, it's a critical skill. Some people are reticent to even think about water and land scarcity, population growth, and climate change. But these issues are already affecting businesses around the globe. We're teaching scenario planning and scenario thinking to get leaders to anticipate the challenges they'll have to face — and when. It's much cheaper to plan for them now."

But building visionary capacity is just one piece of the skills-based program. Orts notes that sustainability leaders must know how to develop a business case for their efforts, how to drive the sustainability mindset through their organizations, and how to perform quantitative analyses. "Since there are few meaningful external requirements, how do you know what measures to take, and then manage what you measure? You need to know how to set benchmarks and understand the metrics available to assess your efforts.

"Corporate diplomacy is also a key skill," Orts adds. "You're going to be in the position of selling sustainability initiatives to your C-suite executives and your stakeholders. Business Sustainability Leadership will help you build those skills with Wharton faculty, experts in the field, and fellow sustainability leaders. Your participation in the program will not only include classroom learning, discussion, and team exercises, but will help you develop a global peer group from diverse industries. We're focusing on the education, but it's your new network that will help you leverage insights from the program well into the future."