In the modern business landscape, organizations worldwide are making ambitious commitments to sustainability, including aligning with Science-Based Targets initiatives (SBTi) and achieving aggressive decarbonization goals. While these commitments are necessary to address global climate challenges, their success hinges on one often-overlooked factor: succession planning.
Leadership transitions in key roles can pose significant risks to an organization’s ability to meet sustainability targets. Without a well-thought-out succession plan, businesses may face disruptions that derail their long-term goals and harm their reputation. Here’s why succession planning is essential to sustainability and how organizations can address this critical issue.
The Risks of Leadership Gaps in Sustainability and Supply Chain Roles
1. Lack of Continuity in Long-Term Goals
Critical roles like the Sustainability Head or Supply Chain Head are instrumental in driving decarbonization and operational efficiency. If these leaders depart without successors who understand the nuances of existing strategies, the organization risks losing momentum and alignment with its sustainability goals.
Example: A Sustainability Head might have overseen a roadmap to reduce carbon emissions by 50% within five years. Their departure without a well-prepared successor could stall or derail this initiative, leaving targets unmet.
2. Loss of Institutional Knowledge
Leaders in sustainability and supply chain operations often possess deep, tacit knowledge about the organization’s strategies, supplier relationships, and compliance frameworks. Losing this expertise without a succession plan can lead to inefficiencies and disruptions.
Example: A Supply Chain Head may have implemented green logistics and mapped supplier emissions. Their departure could leave gaps, leading to increased emissions or inefficiencies if a successor is unprepared.
3. Commitment vs. Capability Gap
Aggressive SBTi or decarbonization targets require leaders with specialized expertise in sustainability, decarbonization, and regulatory compliance. Additionally, such targets may sometimes be hastily committed to without a detailed strategy or plan, and if a key leader departs, the resulting knowledge and capability gaps can make achieving these goals even more difficult. Without succession planning, replacements may lack the technical depth needed to execute these strategies effectively.
Example: A company pledging to achieve Net Zero by 2030 could fail to deliver if incoming leaders lack the knowledge to integrate sustainability into core operations.
4. Disruption in Stakeholder Relationships
Critical leaders often maintain strong relationships with stakeholders such as suppliers, regulators, and investors. Their departure can strain these connections, jeopardizing the partnerships necessary for meeting sustainability goals.
Example: A departing Sustainability Head who had nurtured partnerships with renewable energy providers could leave a successor struggling to maintain momentum in renewable energy adoption.
Linking Succession Planning to Sustainability Success
ESGWEISE Recommendations
ESGWEISE emphasizes that succession planning must encompass all critical roles, such as Sustainability Heads, Supply Chain Heads, and other key leadership positions. Short-term sustainability commitments, like Sustainability-Linked Loan (SLL) targets, require continuity and depth of expertise to avoid reputational or operational risks in case of leadership transitions.
Complexity of Sustainability
Sustainability today spans multiple business aspects, from supply chain optimization and energy management to compliance with ESG standards and stakeholder engagement. Leaders must balance diverse and interconnected challenges, making roles like Sustainability Head and Supply Chain Head not only critical but also uniquely complex.
Skill Gap and Criticality Perspective
The above map highlights the intersection of skill quadrant ratings and overall business criticality. Roles falling into the high criticality and high skill gap quadrant (red area) are the most vulnerable to disruptions during transitions. Sustainability-related roles typically fall in this focus area, necessitating proactive planning to develop successors with the required expertise.
Training and Cross-Organizational Support
Championing Sustainability Across Departments
Sustainability cannot rely solely on one leader or department. Sustainability Managers need each department—such as procurement, operations, and sales—to champion sustainability initiatives. This collaborative approach ensures that sustainability becomes embedded across the organization.
Training for Succession
Training programs focused on sustainability must be implemented across the organization to ensure that successors and other team members understand the complexity of these roles. Such training should include:
Fundamentals of ESG and decarbonization.
Regulatory compliance and reporting standards.
Cross-functional collaboration for sustainability goals.
Practical Insights for Implementation
Embedding Sustainability into Succession Planning
Sustainability KPIs: Ensure leadership roles include key performance indicators tied to sustainability and decarbonization.
Governance Frameworks: Establish a Sustainability Committee to oversee progress and mitigate risks during leadership changes.
Technology Integration: Use digital tools to document and track sustainability initiatives, ensuring seamless transitions even during leadership changes.
Managing Stakeholder Expectations
Proactively communicate with stakeholders about succession planning efforts and ensure they remain confident in the organization’s commitment to sustainability goals, regardless of leadership transitions.
Conclusion
Organizations committing to aggressive sustainability targets, such as those aligned with SBTi, cannot afford to overlook succession planning. Key roles like the Sustainability Head and Supply Chain Head are strategic drivers of these initiatives. Without well-prepared successors, companies risk falling short of their commitments, facing reputational damage, and stalling progress toward long-term goals.
By integrating sustainability principles into succession planning, businesses can ensure continuity, maintain stakeholder confidence, and stay on track to meet their decarbonization targets. Succession planning isn’t just a tool for leadership transitions; it’s a cornerstone of sustainable business success.
Reach out to ESGWEISE for your succession planning, capability building, and sustainability implementation needs.
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