Responsible Leadership: An interview with the former CPO at Danone and SABMiller

Maaike: Today I'm joined by Katharina Stenholm, Independent Advisor. But you are also the former Council Member of the Food and Nature Board of the World Business Council for Sustainable Development. And you are also the former global leader of the Nature Sustainability team and Global Procurement organisation of Danone.

Katharina: Absolutely, yes.

Maaike: Our topic for today is responsible leadership. So, what does responsible leadership represent to you?

Katharina: Yes, I guess it is possible leadership is something we talk a lot about today. And I think, mostly, the discussion centres on making decisions that take the interest of a large stakeholder group into account. So not only the interest of the shareholders, but also employees of the company, customers, suppliers, the environment, and society at large. And I think another way of looking at it is responsibility for multiple bottom lines. So, there is the economic bottom line, of course, in a business context, but also the environmental and social.

Recently, I saw a really nice definition in a blog post where somebody talked about

acting with integrity, at the moment of choice. I think is a nice way of describing responsible leadership. I guess at the end of the day, it all comes down to taking action, for a better future, for all.

Maaike: That's a really nice way to put it acting on integrity when making a decision. What we discussed before; there are two strategies, either how an organisation who has a board of directors and non-executives, who take responsible leadership as a whole or how you see organisations also appointing a Chief Sustainability Officer or sustainable leader.

Since you have been a sustainable leader within a large global organisation, how difficult is it for a sustainable leader to translate this sustainable thinking or act of choosing with integrity, to other senior leadership of an organisation?

Katharina: I think there are many points to what you just said. If we start with, what is the role of a sustainability leader. I guess ideally in an organisation there would not be the need for a CSO because of you see there is a new way of doing business, then you could argue that this is a shared responsibility amongst all the leaders within an organisation.

But on the other hand, we all know that there's quite a lot of change that needs to take place, we need to rethink how we think about our businesses. And that is where CSOs very often get appointed. I think in many organisations, they will turn out to be transition roles, transformation roles. And when you really transform the way of doing business, as I said before, it's all to be integrated.

Your comment or question on how to influence other senior business leaders. I think that's really where for sustainability leaders, you would like to have people who are influencers, have great influencing skills. So, I think it comes down to sitting down with your colleagues and really understand the environmental externalities of your business, both positive and negative, and also understanding the full social footprint you have in your entire value chain, both upstream and downstream.

And I think for me an interesting way of starting to tackle the opportunities and the challenges is to think about, if there was a newcomer, business that wanted to disrupt you, how could they possibly disrupt you by thinking about these environmental social matters in a different way from how you have traditionally thought about them? And use that as a source of inspiration for how we could reimagine our own business before it being disrupted.

First, it is a collective piece of work to think through this, but then you really start to invent your sustainability strategy into your business strategy. Then it is an integral part of the role rather than something that happens on top of, or on the side.

Maaike: And in your experience, because sustainability goals are not only internally focused in your own organisation, but especially externally focused, how important is it, in a sustainable leadership role, to engage other parties outside of your organisation, so, for example, the community or have other people or organisations or within your supply chain?

Katharina: I think it's absolutely imperative because the challenges we're tackling, they are bigger than any organisation. I don't think that there is a company or another organisation who would say, we can go out and solve this alone. So, I think it will all be about collecting groups of like-minded people, organisations, entire value chains and staff to reimagine the future together. So I think for sustainability leaders, those collaboration skills and genuine interest in building partnerships and delivering together is going to be critical for success.

Maaike: What would you what would you advise to new sustainable leaders on where to start? Because sustainability can be such a huge topic and so large, how do you make it concrete into what can I do today?

Katharina: I think about it through materiality assessment. Where do we have the biggest footprint, based on environmental or social or on the governance side, where do we have the biggest opportunity to really make a change? And I think you have to be choiceful because there's just too much to do.

Once you understand where you can really have an impact, go for transformational change rather than nice initiatives, then I would use that materiality as my guiding star. And that's obviously going to be dependent on your business context.

And again, if you think about how you want to reimagine your business, then that will also guide you to think “Okay, so what will be material for this new way of doing business? Where do we need to start?”

Maaike: And what would you advise to organisations now starting on the topic of sustainability, as to what are the easiest recognised benefits for an organisation to really focus and to really invest on receiving and getting results on ESG goals?

Katharina: I think focusing on sustainability is to be future proofing your own business, if there's not a healthy society, if there's not a healthy environment. But then, on a more concrete level, I do think that strong ESG performance is going to be important when we talk about attracting talent, and a certain extent, also capital and financing. People today want to work for companies with a purpose. And we all know that there will be a shortage of highly talented individuals. So, by having strong, well-articulated purpose, and strong ESG performance, I think we can position ourselves as the warriors of choice.

I am also seeing more companies who have their financing linked to ESG performance. So, there could be conditions in financing agreements for better ESG performance and more favourable terms. And we all know that there is a lot of asset managers today, looking for sustainable investment opportunities. I think there's an opportunity there as well. So, very tangible, immediate results and benefits from strong ESG performance.

Maaike: Yes, well, you said a very important thing in terms of attracting talent. If you were to be CEO of a company, and you want to attract your own sustainable leader, what would you look for? What would you select on competencies or qualities or experience?

Katharina: One thing I think we are all talking about is the leadership skills of the future. At the end of the day, you want everybody to be your CSO in the organisation.

What future leaders are looking for, are people who can think out of the box and who can shape the conversation and shape the future for something new. I think people who are brave to take action; people who are prepared to trial and learn.

I think there's an element of caring people, people who care for themselves, care for their teams, business and society at large. Specifically, if you talk about hiring a CSO, at least in the position, finance these goals would be needed. If this is about reshaping your business strategy, solid business acumen goes without saying.

There's also a really interesting way of looking at the CSO as somebody who is really thinking about the ecosystem of the business ahead of their own egosystem. Someone who is looking at “What can I achieve? What are my goals?” I think is set up for failure, because it's all about how can we transform this business? And there's some really nice work been published in the last few years, on how to replace your egosystem with the ecosystem that you are building for your organisation. I think that would be a good frame in any CSO.

Maaike: Well, that's a great answer, Katharina, because it brings us back to the full circle of making choices with integrity. And you made the point of the egosystem and the ecosystem; there's a big difference. And I think the underlining thing of course, is integrity.

I want to a thank you so much for joining me and for sharing your thoughts. And I hope together we can build a more responsible world and a more sustainable world for the future.

Katharina: Absolutely, thank you. It was great to be here. And at the end of the day, we all need just remember one thing, and that is to take action.

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