Sustainability has become a popular term in business, with companies and organizations promoting social and environmental initiatives. This blog post explores the relationship between executive search and sustainability in the U.S. market. Sustainability markets, such as Sustainable Finance, Energy & Cleantech, Climate Change, Smart Buildings and Cities, Agtech, and organizations looking to implement transformational change and forward their sustainability/ESG agenda, are all considered under the sustainability umbrella term.
How Executive Search Plays a Role in Sustainability
The sustainability market is growing, and it's predicted that global sustainability assets will reach $53 trillion by 2025. Sustainable investments are outperforming non-sustainable ones, and President Biden has made climate change a priority through executive orders. To keep the U.S. economy competitive globally, business leaders must take proactive measures to adapt to this shift.
According to Will Shannon, Co-Founder at Shanrock Partners, the US business landscape is experiencing a “sustainable rebirth”. Companies must evolve to drive purpose-driven, value-based change. Business leaders, according to Mr. Shannon, “need to produce an actual impact and create measurable sustainable change over the years” if they are to stay afloat. Doing nothing can harm your reputation and potentially lead to extinction.
Executive search firms are adapting to this surge of sustainability in the corporate landscape, moulding their services to cater to the “sustainability revolution”. This introduces a new element to the search profession. Executive search firms are trusted by their clients to source and assess top leadership candidates, delivering a solution that benefits their clients and society. Executive recruiters are now required to have a deep understanding of the ESG/Sustainability landscape to identify the most qualified executives for these roles.
The Evolution of Sustainability Executive Search
Sustainability Executive Search has undergone a large transformation over the past decade. In 2021, Weinreb Group conducted an extensive report on “The rise of ESG in the C-suite”, which showed how the CSO position grew by more than 228% at U.S. publicly traded companies in just ten years, from 29 CSOs in 2011 to 95 CSOs in 2021. Ellen Weinreb, Founder of Weinreb Group, explains that the exponential rise of the CSO stems from an increasing need for transparency and accountability when it comes to sustainability reporting.
Executive search firms specializing in sustainability as a function have flourished in tandem with the growing need for businesses to provide reliable ESG-related disclosures. Top executive search firms have recognised the growing importance of sustainability in the corporate world. Heidrick & Struggles, one of the five largest global executive search firms, established a Global Sustainability Practice in 2019. According to Scott Atkinson, Co-Head of the Global Sustainability Practice, sustainability is now an integral part of the company's operations, and they strive to integrate it into all their services.
In today’s economy, a company’s sustainability strategy is critical for creating value. Therefore, CEOs and Boards cannot ignore the sustainability agenda. As Scott Atkinson notes, investors are pressuring CEOs and Boards to consider how ESG fits into governance charters. This means that executive search firms are at the forefront of driving the interdependency between executive teams and corporate sustainability. Executive search firms are getting better at finding C-level and Board candidates who have experience in ESG and can offer purpose-driven leadership.
However, issues can arise when searching for candidates with specialist experience. Executive search firms have had to adapt to the challenges of the supply and demand for candidates with hard-to-find technical skills, especially within sustainability industries such as Climate Tech. Matthew Cohen, Practice Leader of Energy & Sustainability at Direct Recruiters Inc., suggests that companies should think about other areas and industries where candidates’ experience is applicable to the roles they are hiring for. Executive search firms are supporting businesses to “recruit tangentially” in order to overcome the shortage in the market.
The sustainability agenda is critical for CEOs and Boards in the current economy. The link between executive teams and corporate sustainability highlights why it's essential to find C-level and Board candidates who can offer purpose-driven leadership through sustainability executive search. The evolving nature of sustainability executive search and the growing need for businesses to provide reliable ESG-related disclosures have led to a flourishing sustainability executive search market. The United States market is leading the way in this revolution, and many executive search firms have positioned themselves at the forefront of this change.