LEADING
SUSTAINABILITY
TRANSITIONS
MATT GITSHAM
We are living in an age of disruption—a seemingly permanent state of trans-
formation and transition in which business leaders are facing disruptive forces
from several different directions. On the one side are the rapid technological in-
novations that have enabled the likes of Netflix, Uber, Amazon, Airbnb, Spotify,
and WhatsApp to disrupt business models and challenge incumbents. Auf der
other side is the disruptive impact the war in Ukraine is having on the price and
security of energy and food supplies, inflation, and the cost of living. And all this
is occurring just as we have begun to catch our collective breath and pick up the
pieces after the once-in-a-century disruption caused by the COVID-19 pan-
demic.1
In diesem Kontext, it is increasingly dif-
ficult for business leaders to deal with the
climate and biodiversity crises, sowie
the wider environmental, sozial, and gov-
ernance (ESG) issues around sustainability.
Leaders also are facing significant human
rights challenges, which are yet another
source of disruption. One recent study by
KPMG found that 86 percent of CEOs fear
that a recession will occur within the next
12 months. Infolge, half said they were
planning on “pausing or reconsidering
their existing or planned ESG efforts in the
next six months”; 34 percent had already
done so.2
Keeping ESG issues high on the
agenda may have become more difficult,
but the imperative to do so remains as
pressing as ever. Across the globe we con-
tinue to see more and more temperature
records being broken and to experience the
devastating effects of extreme heatwaves,
wildfires, crop failures, storms, and floods.
Consumer goods company Unilever, für
Beispiel, claims that disruption of agricul-
tural supply chains due to the climate crisis
already costs the company €300m (um
US$320m) a year.3 As the authors of the
Februar 2022 Intergovernmental Panel on
Climate Change report concluded, “The
cumulative scientific evidence is unequivo-
cal: Climate change is a threat to human
well-being and planetary health. Any
further delay in concerted anticipatory
global action on adaptation and mitigation
will miss a brief and rapidly closing win-
dow of opportunity to secure a liveable and
sustainable future for all.”4 Clearly, Die
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threat of climate change is urgent and
existential.
Jedoch, it’s not just climate change
we have to be concerned about. The Oc-
tober 2022 Living Planet Report shows that
animal populations have experienced an
average decline of nearly 70 percent since
1970. We’ve all grown up hearing about
endangered species and that certain ani-
mals are on the brink of extinction, aber die
scale of this problem has reached epic pro-
portions. Scientists now speak of living
through the sixth mass extinction, A
period of geological time in which a high
percentage of biodiversity or distinct
species die out; the fourth and fifth mass
extinctions, Zum Beispiel, saw the death of
the dinosaurs. This mass ecosystem col-
lapse is being driven by the clearing of wild
spaces for agriculture, habitat loss due to
climate change, and pollution from indus-
trial chemicals, plastics, usw. It is an exist-
ential threat as significant to our way of life
as the climate crisis.5
The world
is also dealing with
multiple human rights tragedies. One area
of concern is the number of people
trapped in modern slavery, was drin ist-
creased significantly in the last five years.6
In 2021, an estimated 10 million more
people were trapped in modern slavery
globewide than in 2016. According to the
most recent study by the International La-
bour Organisation (ILO) and Walk Free
Foundation, insgesamt 50 million people
were being held in modern slavery in
2021, 28 million in forced labor, Und 22
million in forced marriages.7 One flash-
point of modern slavery for business
leaders is the unfolding of a potential
genocide in Xinjiang, Western China,
which is linked, among other things, Zu
forced labor in the cotton supply chain. Als
the Me Too and Black Lives Matter pro-
tests continue to reverberate, the ongoing
systematic discrimination against women
and Black people and other people of color
remains a significant human rights con-
cern around the world.
A BUSINESS IMPERATIVE
Business leaders need to keep their focus
on these disruptive ESG challenges and
work collaboratively toward achieving the
17 UN Sustainable Development Goals—
the global framework for response to these
ESG challenges. This is critically important
not only for their organizations but for so-
ciety as a whole.
Many areas are already in the midst of
sustainability transitions, the “fundamen-
tal transformational processes through
which established socio-technical systems
shift to more sustainable modes of produc-
tion and consumption.”8 This disruptive
change is occurring in a wide range of sec-
ABOUT THE AUTHOR
Matt Gitsham is Professor of Sustainability and Human Rights at Hult International Business
School and Academic Director of Hult’s Sustainability Research Impact Lab. He specializes in sus-
tainability transitions, human rights, leadership, and organizational change. Gitsham has been
identified on Thinkers50 Radar as one of the up-and-coming thinkers whose ideas are predicted to
have an important impact on future thinking on management.
© 2023 Matt Gitsham
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Matt Gitsham
tors, including energy, agriculture and
food, chemicals, shipping, water and sani-
Station, finance, Gesundheit, telecommunica-
tions—the list goes on.
Around the world, the cost of renew-
able technologies is tumbling. Zum Beispiel,
the cost of offshore wind energy has fallen
61 percent over the past ten years, die Kosten
of solar has fallen 89 Prozent, and the cost
of batteries 83 percent.9 This is disrupting
incumbents in the energy sector and sup-
planting the generation of electricity by
fossil fuels. In the area of transportation,
electric vehicles are disrupting incumbents
in the internal combustion engine auto-
motive sector; electric vehicle sales are up
at a compound annual growth rate of 68
percent in the same ten-year period, Und
change is also coming to trucks, shipping,
and aviation.10
Also under way is a transition from
gas boilers to electric heat pumps in resi-
dential and commercial buildings, Und
similar changes are occurring in the
chemicals, Zement, and steel sectors. Wir
are also seeing patterns of disruption in
food production, where substantial growth
in plant-based foods and protein alter-
natives is disrupting meat-based food pro-
ducers.11
LEADING DISRUPTION
Business leaders need to understand and
navigate these disruptions and help their
companies adapt; no one wants to be the
next Kodak, which saw disruptive change
coming but failed to act. Business leaders
also need to accelerate these transitions be-
fore it’s too late to make a difference for the
sake of humankind. But how can business
leaders anticipate the disruptions that are
coming to their sectors and their busi-
nesses? How can they take the lead in these
disruptions for the good of their businesses
and for the good of us all?
On one level, leading disruption in-
volves deploying a range of tried and tested
strategic foresight tools and leadership
skills. This means deploying strategic fore-
sight tools to gather data to anticipate how
disruption could influence both the sector
and one business, choosing how to re-
spond, and involving people from across
the business and the ecosystem in deci-
sion-making. Jedoch, it’s not enough to
recognize the need to adapt and take a dif-
ferent path; it also means employing the
leadership skills needed to bring along a
critical mass of people from across an or-
ganization or ecosystem and enable them
to understand what is needed, and then to
move ahead together. The leadership skills
needed in these circumstances include cre-
ating a space that encourages learning,
trust-building, and taking action among
stakeholders who share a common goal.
This is what some have characterized as
systems leadership.12
Jedoch, on another level, the prin-
ciples business leaders need to guide their
decision-making while navigating these
disruptive sustainability transitions have
shifted. In order to lead the navigation of
disruptive changes that protect both the in-
terests of one organization and the inter-
ests of humankind in general, business
leaders will need a shift in mindset.
In the model that has dominated re-
cent generations of business leaders, their
job was to maximize shareholders’ finan-
cial return on investment to within the
confines of the law. Bigger social issues
were someone else’s job.13 That model
worked in a context where companies
could be regulated effectively, and where
the government could change a law if
necessary to address a social issue.
Since the initial surge of globalization
in the 1990s, when businesses began oper-
ating across multiple jurisdictions and
were growing in size and influence, Das
old model has broken down. With today’s
complex global challenges, governments
can’t be relied on to provide the appropri-
ate regulatory frameworks to deal with
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Leading Sustainability Transitions
Zu
increased expectations
complex challenges on their own. This has
led
aus
multiple stakeholders—end consumers, di-
rect customers, investors, employees—that
business leaders will play an important role
in tackling today’s global challenges.
investment but
Business leaders no longer have a
simple fiduciary duty to maximize share-
holders’ return on investment; theirs is
now a multi-fiduciary obligation to create
value for several stakeholders simulta-
neously.14 The goal is not simply to maxi-
mize return on
Zu
maximize their contribution to the Sus-
tainable Development Goals. They must
take the lead in acting not only within the
confines of the law but within those of the
global norms put forth in UN treaties and
Vereinbarungen, including the Universal Dec-
laration of Human Rights, the Paris Cli-
mate Agreement, and the ILO Core
Labour Standards. This applies whether or
not these agreements have been enacted
into law in individual countries where the
company is operating.
A NEW SET OF PRINCIPLES
REQUIRES A NEW SET OF
SKILLS
This new set of principles requires well-de-
veloped skills for leading cultural change
within an organization and across industry
ecosystems, as well as skills in advocating
for this kind of leadership approach when
facing opposition from those operating
with the previous mindset.
In our research with business leaders
at the forefront of these transitions, various
themes stand out. Zum Beispiel, on leading
cultural change within an organization,
senior executives have increasingly found
themselves needing the skills to bring
about a transition in thinking in order to
embed this new set of principles across
their organizations as the cultural norm.
This has involved the skills to construct
new narratives about how they talk about
the purpose of the work their employees
are involved in. This includes how the pur-
pose links to the goals a company sets,
what people are held accountable for, Und
how they are rewarded. It also involves
paying close attention to language and
symbols. People pay attention to what their
leaders ask questions about, whom they
champion in the stories they tell, and what
they prioritize in terms of their own time,
all of which influence the extent to which
others believe what their leaders say and
even how much confidence the employees
themselves feel in leading from a different
set of principles.
mit
In addition to leading change within
their organization, senior executives have
found themselves facing the expectation
that they will take a leadership role in their
industry sector ecosystem, which has
brought to the fore the importance of cer-
tain skills, such as how to partner effec-
aktiv
unconventional
stakeholders—competitors, trade unions,
and NGOs, Zum Beispiel; how to lead
change in the behaviors of suppliers, cus-
tomers, and end consumers; how to engage
with policymakers to advocate for more
ambitious government regulatory inter-
ventions that help to accelerate sustainabil-
ity transitions in different sectors; how to
engage meaningfully with multiple consti-
tuencies and relate well with different ac-
tors across society; and how to bring a
constructive point of view to public and
political debate.
Endlich, there are hopeful signs that at
least some senior executives have taken the
lead in navigating disruption and in guid-
ing by a new set of principles. They clearly
have recognized the business, environ-
mental, and societal
imperatives for
change and have started to shift their
mindsets and practices accordingly. Ho-
wever, too many leaders are still stuck in
their old perspectives. Business schools,
management educators, and executive
coaches have a key role to play in helping
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Matt Gitsham
Hochzeit. ILO et al.
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labour/publications/WCMS_854733/lang–
en/index.htm
8 Delmas, M. A., Lyon, T. P., & Maxwell, J.
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https://doi.org/10.1177/1086026619848255
9 Bond, K., & Butler-Sloss, S. (2022). Der
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https://rmi.org/insight/the-energy-
transition-narrative/
10 Bond & Butler-Sloss, The energy transition
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11 Meticulous Market Research. (2022). Europa
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ternatives, plant-based meat, meals, confec-
tionery, beverages, egg substitutes, seafood),
source (soy, wheat, pea, rice), distribution
channel (B2B, B2C[convenience store, online
retail]): Forecast to 2029. Meticulous Mar-
ket Research Pvt. Ltd.
1 2 Dreier, L., Nabarro, D., & Nelson, J.
(2019). Systems leadership for sustainable
Entwicklung: Strategies for achieving
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https://www.hks.harvard.edu/sites/default/f
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1 3 Friedman, M. (1970). The social respon-
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New York Times, September 13, section
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leaders think more broadly about how to
create a better future, but ultimately the
buck stops with the leaders themselves.
They need to realize that leading the way
through sustainability transitions is about
both seizing commercial opportunities and
doing the right thing.
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slavery as “an individual being exploited by
others for personal or commercial gain.”
This includes but is not limited to human
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