Sustainability Competencies -The New Frontier
A joint report by the United Nations Environment Programme Finance Initiative and Principles for Responsible Investment Association highlighted that: “The world’s 3,000 largest public companies were estimated to be causing $2.15 trillion of environmental damage. Some 60% of those negative impacts were concentrated in the electricity, oil and gas, industrial metals, mining, food production as well as the construction and materials sectors.”
With worldwide stock exchanges starting to play a more significant role in raising awareness about the importance of sustainability and shifting capital towards socially responsible investments, companies with unsustainable practices will risk losing their competitive advantage.
Despite the increasing demand for better management of sustainability issues, it was reported by the Institute of Environmental Management & Assessment that only a small percentage; 13% of companies worldwide are confident that they have the necessary skills to compete in a sustainable economy.
Businesses today need to adapt to ensure that they are able to address stakeholders’ concerns. One of the ways in which businesses can deal with urgent sustainability challenges is by “upskilling” the competencies of their employees. Yet, the discussion on the required skills, knowledge and behaviour to drive sustainability is generally scarce.
This is problematic because if companies are not aware of what sustainability competencies should be measured, clearly they will not embed this into the workforce. Furthermore, the current literature on sustainability competencies entails a great deal of terminological ambiguity, associating the term competencies with skills, abilities, capabilities, capacities, qualifications and other concepts.
Traditionally, companies have focused on environmental, safety and health competencies. These include among others: knowledge and understanding of environmental/health management systems, an understanding of workplace hazards and risks, understanding legal compliance and incident management requirements.
These competencies remain within a technical domain. With sustainability issues becoming more widespread and complex, the skills required will need to extend beyond the technical domain. Core sustainability competencies would need to be defined to transform the workforce into sustainability problem-solvers and change-agents.
To meet this objective, the Arizona State University, in a landmark study, has worked on unifying different frameworks relating to sustainability issues. An outcome of this study is the proposal of five categories of sustainability competencies:
- Systems thinking competency
Ability to collectively analyse complex systems across varying domains (environment, social, economic) and across different states (local to global). Employees are expected to analyse complex systems, comprehend, empirically verify and articulate key structure, components and dynamics of an issue. This competency is required as the concept of sustainability deals with understanding the complexity of coupled systems as well as both temporal and spatial scales.
- Anticipatory competency
Ability to collectively analyse, evaluate and envisioning future challenges related to sustainability issues and sustainability problem-solving frameworks. This competency is required as sustainability calls for long-term future orientation, anticipation and prevention of harmful unintended consequences.
- Normative competency
Ability to map, specify, apply and negotiate sustainability values, principles, goals and targets. Employees are expected to know which practices can be transformed or discarded and which must be maintained to sustain viability of the life-supporting systems. This competency is required since the concept of sustainability is often value-laden, that the development of effective solutions must take into account the context of social-ecological norms.
- Strategic competency
Ability to collectively design and implement interventions, transitions, transformative governance strategies toward sustainability. The complexity of sustainability problems require an effective matching of transition strategies to address existing issues.
- Interpersonal competency
Ability to motivate, enable and facilitate collaborative and participatory sustainability research and problem solving. Advanced skills such as communication, deliberation, negotiation, collaboration and trans-cultural thinking are required. Sustainability challenges affect a myriad stakeholders with varying experiences, resources, perspectives, and preferences. Hence, solving sustainability problems require strong stakeholder collaboration as well as negotiation among multiple stakeholders from different disciplines.
In order to remain competitive, companies must rise to the challenge of embedding sustainability competencies in their workforce. After all, according to Gerlinde Herrmann, “It is the people that are the drivers of sustainability –both within the organisation and in terms of how it interacts with the communities in which it operates. HR needs to grab hold of this opportunity and champion it.”
About Renard Siew
Renard Siew is currently a Senior Executive at Group Sustainability, Sime Darby Berhad, a multinational conglomerate based in Malaysia. Prior to this, he has held multiple roles as a postdoctoral teaching fellow, a research associate at the Centre for Energy and Environmental Markets (CEEM), Sydney and as a business performance analyst. Renard completed his PhD at the University of New South Wales (UNSW) under the Australian Postgraduate Award (APA). He has published extensively in international refereed journals and was bestowed the Highly Commended Paper award by the Emerald Literati Network. He was the recipient of the Yayasan Sime Darby Scholarship, ARG Hermes Scholarship, Brookfield Multiplex Prize and the Australian Conferences Management Education for Engineers Award (ACMEE).