However noisy the climate change cynics become, sustainability has to be at the top of the corporate agenda – and change leadership skills are essential for enabling new behaviors.
It is a daunting challenge by any measure. The science is unequivocal: humanity needs to slash its carbon emissions, and fast, if it is to have any hope of averting calamitous climate change in the coming years. As business leaders globally increasingly accept, companies have a major role to play.
But carbon is the byproduct of almost every element of economic activity. Reducing emissions can have implications for each part of an organization – and that makes it a leadership challenge like no other. It is an insight that Paul Gleeson of the design, engineering and advisory company Aurecon describes as the biggest lesson of his firm’s sustainability journey in recent years.
“Corporate culture is such that people often have this perception that everything is under control,” says Gleeson. “They assume there’s a plan in place, or a sound strategy, so they think, ‘I shouldn’t stick my nose in.’” That has to change. “When you see an issue, or a gap that needs closing, it’s about not waiting for someone else to close that gap, but instead saying: ‘I see something here that is a risk or an opportunity for us.’ If it needs addressing, then raise it and offer to get involved with closing the gap, straight away.”
Fundamentally, that is a question of culture. “If you’re in a good organization, whatever level you’re at – whether you’re an exec or you’re a graduate – the culture should be such that you could put up your hand and someone will either say, ‘Yep, we’re on it,’ or ‘No, I’m glad you raised it.’”
Leaders underestimate this aspect of sustainability leadership at their peril, thinks Gleeson. “The further I go into this space, the more I’m convinced that this is the actual answer.” Senior leaders have to lead the way, but they need to avoid being prescriptive, he suggests. “It’s unleashing this passion that exists in so many people. Rather than saying ‘Here are the tablets, here are the commandments’, it’s saying, ‘Here’s the framework.’ The people in the business who are working every day with clients are the best placed to figure out how we can create more sustainable outcomes.”
Today, Gleeson is Aurecon’s managing director, energy – Australia & New Zealand, and group director, sustainability. Having joined Aurecon to lead its energy business, his path toward a broader sustainability role began with raising his own hand and asking a question about what more the company could do on sustainability. “I got a good response from our CEO, Bill Cox. He said ‘Yes, we agree there’s a gap that needs closing. Why don’t you get a working group together and get right into it?’ And it really grew from there.”
Aurecon has made itself a fascinating test case for how business can become more sustainable, not least when it comes to the net zero transition. “We had a very natural alignment to sustainability because we’re a very purpose-driven organization,” Gleeson explains. “We’re employee-owned, and we were already focused on sustainable outcomes in many areas, but we hadn’t actually linked that with a top-down board- and executive-driven sustainability strategy. That hadn’t been a problem in the past, but going forward it risked leaving us a bit exposed.”
The heart of the challenge – change leadership
Aurecon’s sustainability journey has led Gleeson to a surprising conclusion about the leadership expertise needed. “You don’t need to be a sustainability subject matter expert. For me, it’s actually about change leadership. You need to be someone who’s passionate and really wants to lead change through an organization. Are you willing to get in and engage closely with the people who are the least enthusiastic about change?” That insight is one of the reasons why Aurecon has worked with Duke CE to support its leadership development.
Aurecon quickly established three pillars to its sustainability work. “The first was getting our own house in order,” says Gleeson: that included setting an ambitious net-zero target for 2025, and undertaking a thorough examination of the firm’s social footprint. The second pillar was building a dedicated advisory business on sustainability and climate – an area that has thrived in recent years. “The third priority is weaving sustainability into the whole business, putting sustainability on the agenda equally for all of Aurecon’s 7,000 people so they can deliver more sustainable outcomes on our client projects. I see that as the biggest task,” says Gleeson. “How will we do that consistently, given that everyone’s working on very different things? It requires a systematic firm-wide approach, yet it still needs to be organic and agile and able to be adapted by each team for each project, each client, asset and project.”
Leaders need to set the tone for their teams, says Gleeson. “People have to feel psychologically safe, because often it will mean proposing things that might appear to be sub-economic or more risky – because it’s using unproven technology, or it slows down the project – all the sorts of things that you’re not normally allowed to mess with.”
Accountability and opportunities
Of course, what counts as ‘normal’ is changing rapidly on multiple fronts – including corporate reporting on sustainability. It is essential for holding companies to account, argues Gleeson. “One of the big risks for sustainability is that it’s all promises and no action,” he says. Robust reporting standards mean companies are unlikely to get away with overclaiming their sustainability credentials. “We’ve got to be able to withstand scrutiny.”
As Gleeson points out, reporting itself is not a driver of change. Businesses can still opt for strategies based on fossil fuel exploitation, for example; some investors may still back those firms. But reporting enables comparisons and allows for external challenge. “Systems, reporting, metrics – it’s the boring and dry stuff! But if you don’t have that, people can’t interrogate things like real emissions reductions per annum, per site, per head, and so on. Without that, it’s all just talk.”
Reporting requirements may be the “stick” for encouraging businesses to behave differently, but Gleeson prefers to focus on the “carrot”: not only the direct revenue opportunities, but the deep impact that sustainability has on other aspects of organizational performance. That includes talent.
“If you look at most professional services firms’ strategies, you’ll find this big thing about trying to attract and retain the best people,” says Gleeson. “I have definitely seen an increasing proportion of the talent pool we want to access, or hold on to, putting sustainability at the top of their priorities.
“They’re saying, ‘I want to work for a firm that is really strong on sustainability.’ Whether an individual is more focused on social or environmental sustainability doesn’t really matter, they want to feel that alignment. Their identity is linked to the brand that they choose to work for.”
Is that the preserve of younger employees – of Gen Z and Millennials? Not at all. “We’ve got people at the other end of their career who are really focused on legacy and want to know we take this seriously.” It makes sustainability a crucial enabler for Aurecon’s entire corporate strategy.
Indeed, the three pillars of Aurecon’s sustainability work are closely linked. Perhaps most fundamental is the need for a good track record to underpin the firm’s credibility when it comes to advising others on sustainability. “If you want to play in that space, you need to have your own house in order,” reflects Gleeson.
Progress on net zero
We turn to Aurecon’s target for achieving net zero carbon emissions by 2025. That date isn’t far off. “We are on track – we will hit it,” confirms Gleeson. “But some things haven’t been straightforward.” Some workstreams have run into delays or been hampered by supply-chain bottlenecks, such as the limited availability of electric vehicles (EVs), but despite that, the project remains on course.
What lessons does Gleeson draw from this ambitious work? “One major learning is that behavioral changes can have a bigger impact than technology changes,” says Gleeson, “which surprised me.” He points to the switch of the company fleet to EVs. For heavy four-wheel-drive diesel vehicles, the challenge has been finding suitable replacements. For light vehicles, there are numerous good options. “This is where some of the people in that workstream said to me ‘Let’s hit the brakes. Why don’t we look at whether we even need to replace these vehicles? Should all these journeys be single-person vehicle trips? What’s the use case? Wouldn’t it be better to encourage people to firstly figure out if they can get the train or walk?’” Looking at the existing fleet and assuming a like-for-like EV replacement is required is “the engineer’s answer”, says Gleeson. “We’ve learned we have to look again at the use case and the behavioral choices.”
Gleeson also underlines the importance of leaders engaging with operational functions right across their business. Senior backing is key. “You have to have 100% support from the chief executive and board, otherwise you’re going to spend all your time discussing whether or not we should be doing this with every procurement person in the business,” he warns. “That’s not about using authority as a sledgehammer. It’s just about being clear, ‘This is where the business is going, so we all have to figure out how to help find the net zero version of this product or service.’”
How does Gleeson handle resistance? “I have spent time with some people one-on-one. If I get a sense someone is really against what’s happening, it’s better for me to understand than to ignore that,” he says. “That’s been a tiny minority, but it’s so important – we need to understand that not everyone has the same worldview.” In a divided and often polarized world, this is a crucial point. “I always take the view that I’ve got to engage with opposing perspectives,” says Gleeson. “Otherwise I’m at risk of living in my bubble.”
He views political attacks on ESG in the US as “quite extreme”, though there are some echoes in Australia and other markets. He sees the disclosure and management of climate risks as good business leadership rather than anything to do with politics or ideology. Gleeson refers to Nate Silver, the American statistician and author of The Signal and the Noise. “What we’re talking about here is the noise. There’s a hell of a lot of it – but the signal is where we should focus.
“When I look at my world, which is energy transition, I have a really strong signal, which is that there’s now over $320 billion pointed at renewable energy transition in Australia. There are zero dollars pointed at new coal fired power stations – but there’s a whole lot of noise.” His impulse to engage with opposing opinions sometimes needs to be checked. “I want to go and argue with those people, but every time I spend an hour doing that… Well, the signal is telling me, just get back to what you’re doing, because that’s where the investment is going.”
The journey to sustainability
Some sustainability leaders come to the field from people and social issues, often from an HR background, but Gleeson is a trained engineer. His career began in the energy sector, and his path to sustainability was through a passion for renewable energy and the dream of decarbonizing the whole energy industry. “I’ve had to learn a lot about all the other pillars,” he says. “But actually I don’t think anyone should pretend to be a subject matter expert across something as broad as sustainability.”
Building capability means bringing in the right people, as Aurecon has in recent years. “We found someone who’s genuinely leading on the circular economy, so she’s grown a team; someone else who’s an expert on climate transition risk, and now she’s grown a team.” That reflects the scale of the challenge. “In this space, it is so much about collaboration. It’s way too big for any individual.”
The point about collaboration is critical for organizations as they problem solve with partners through their supply chain to bring down emissions. Gleeson firmly believes that greater collaboration will be essential, within and between organizations and across economies: the more that businesses learn to bring together diverse perspectives, the better. “As a species, the challenges ahead of us are massive – we are going to need people who want to figure things out that haven’t been tackled,” he concludes.
Clearly, technical experts will play a major role in devising solutions – but so too will leaders who can help change corporate behavior and build alignment around a new set of priorities. The stakes for such collaborations could hardly be higher.
Our hopes of creating a sustainable future depend on them.
Patrick Woodman is editor of Dialogue.