Knut Haanaes, Professor of Strategy and Lundin Sustainability Chair at IMD Business School, explains why CHROs will play a key role in their organizations’ progress towards net zero.
As organizations pursue the decarbonization imperative with increasing determination, there is a growing realization that no single leader or business function alone will be able to drive progress towards net zero. One role that will nevertheless be vital in the process is that of the Chief Human Resources Officer (CHRO).
A significant organizational challenge
The transition to net zero is a challenging exercise in large-scale transformation. Organizations will approach decarbonization in different ways – and certainly at different paces – but all will experience a period of significant change and upheaval. At IMD, our experience of transformation initiatives tells us that they succeed or fail according to the leadership and the capabilities of the organization.
Enter the CHRO, whose role is to work with the leadership of the organization as it strives to provide adequate direction and a supportive culture to allow the workforce to deliver its net zero vision. The CHRO must operate at both strategic and organizational levels, helping the leadership to develop a clear purpose while scaling up the understanding and competencies of those who will put this purpose into practice.
This is a challenging remit. Transformation requires both bold innovation and courageous decision making to marshal the requisite technical skills, which are themselves in short supply. Moreover, organizations must drive internal change with urgency if they are to meet the Paris Agreement goals to reduce emissions by 45% by 2030 and reach net zero by 2050.
Nevertheless, CHROs are well placed to rise to the occasion. The skills they have developed around people management, learning and development, and their ability to fine-tune organizational culture, will all be vital on the journey toward net zero.
Above all, the task for CHROs on net zero is to build collaborative and systems leadership skills in their organizations. We can only confront climate risk together – no single organization has sufficient resources or power.
Supporting strategic transformation
Strategically, as the organizational leadership decides how to combine purpose and sustainability, the CHRO will play a supportive role. But that is not to downplay the role’s input; just as operational functions such as Sales and Marketing will have strong views on the priorities of the organization’s clients and customers, CHROs will understand the internal dynamics of the business in terms of their effect on employees.