Dynamo was delighted to host a conversation on what responsible leadership looks like in light of the mounting challenges, including climate change, COVID-19, and social inequality. Laura Zelenko, Senior Executive Editor for Talent, Diversity, Training and Standards at Bloomberg interviewed Halla Tómasdóttir, CEO of The B Team.
The B Team is a group of innovative business and civil society leaders working together to transform business for the future, with a focus on climate change, equality, and responsible governance. Throughout Halla’s career, as a business leader, entrepreneur, investor, and presidential candidate, she has been dedicated to purpose-driven and principled leadership.
Laura Zelenko, whose work at Bloomberg focuses on improving representation across every level of the Bloomberg newsroom and in content on every platform by accelerating initiatives to recruit, retain and develop top diverse talent, kicked off the conversation by taking us back in time to January 2020. At that time, before the world was struck by the COVID-19 pandemic, Halla spoke in Davos about the power and expected impact of the clean energy and corporate responsibility movement of 2019. At Davos, she observed that the movement was driven largely by the next generation, who were acutely concerned about their future in the world of changing climate and growing social divides. Laura stressed that this activation had an impact on leaders both in government and in the corporate world, leading to resurgences in ESG investing and emissions reduction commitments for corporations around the world.
A convergence of crises calls for a different kind of leadership.
While 2019 and 2020 saw mobilization around climate, the world was unexpectedly hit by the pandemic, followed by social unrest over systematic inequality, to which political and business leaders around the world responded in very different ways. Responsible and good leadership — from international organizations, governments, and businesses — suddenly became more important and complex than ever.
COVID hit on top of an existing climate crisis, unsustainable levels of inequality, and low trust in institutions. “COVID accelerated those issues. Those who we already left behind are further behind, and our trust in businesses, media, and event democracy is lower than I’ve ever seen it.” However, Halla noted, COVID has also mobilized people and unleashed humanity and movements to hold leadership accountable, leading to renewed social activism in many parts of the world.
Halla stressed that while she still sees a lot of failure of leadership in boardrooms, there’s also a wave of positive action among business leaders who act independently from politics and who recognize that they need to win trust, respect, and business of their customers that increasingly care about the environment, fairness, equality, and more.
“There is no business beyond planetary boundaries nor with a broken social contract. The 50 yearlong Friedman era of shareholder primacy is coming to an end.”
Laura, who herself is a driving force of diversity in the world of big media, then asked about positive examples of accountable leadership from a governmental standpoint. The importance of diversity and examples of good leadership from women leaders, from the Nordics to Taiwan to New Zealand, immediately came up. Halla clarified that this is not about women versus men, but about the mindset that emerges when we have diversity — a leadership style that is more shared, more collective, encouraging of conversation aimed at understanding the other’s point of view. A leadership style that is trusting in science and that is humble.
“Changing a world that is dysfunctional is going to take all of us. There is no one person, company or country that has all the answers to these great global challenges. Instead, it will take collectively the public sector, the private sector, the civil society, and its citizens to reimagine a world where we don’t face constant weather events or constant pandemics.”
Everyone wants to prosper on a healthy planet.
For businesses, announcing ambitious targets should not be an achievement in itself. Instead, transparency and frequent reporting on their progress is key for any meaningful change. Halla stressed that while everyone wants to live in a prosperous society and on a healthy planet, division in society will make it a challenge to get there. Leadership is all about maintaining the focus on where you need to go and then doing the hard, courageous, and often uncomfortable work to get there. She outlined key steps that business leaders need to take to become true agents of positive change:
– First, shifting from quarterly reporting mindset to thinking long term when working to tackle massive challenges like climate change, inequality, diversity.
– Second, reimagining the definition of success. The definition that was created over 50 years ago prioritized financial profit in the short term, which has failed us. The expansion of that definition to include ESG or the SDGs or a triple bottom line will allow for a more holistic mindset.
– Third, moving away from shareholder primacy and from the idea that the only responsibility of a business is to maximize its shareholders’ wealth.
Will COVID make us go backwards on ESG, diversity, equality?
The impact of COVID on these trends, and particularly about whether this crisis will affect ESG as a leading investment strategy is on everyone’s minds. Halla reiterated that many businesses still operate from the standpoint of maximizing wealth at all costs, but that this trend is unsustainable and is under rapidly growing pressure from the public.
The mobilization of young people demanding action and change from governments and businesses on climate change is meaningful because, Halla noted, businesses care about attracting the best talent, hence they should care about what the talent wants. There’s growing pressure on businesses to act, and COVID is unlikely to ease this pressure as it only accelerated the issues that existed before, from inequality to inaction on global crises like the changing climate.
“Real leadership now is about transforming your sector, transforming your country, coming together even pre-competitively to solve issues.”
Businesses should talk to each other and work to tackle the issues that threaten to deteriorate of our natural environment as it will mean an impact on their supply chains, their customers, and could make their businesses no longer viable. Taking steps to tackle climate change makes business sense, and thankfully more and more leaders in the corporate world are realizing it every day.
To hear more from Halla and Laura, watch the interview replay here.