Global policymakers set an ambitious course for progress towards a more sustainable and inclusive world by 2030 with the adoption of the UN Sustainable Development Goals (SDGs) in 2015. Firms joined this commitment through the UN Global Compact initiative with public commitments in their sustainability reports and strategies.
However, by all accounts, progress has been too slow. Neither governments nor most businesses are moving fast enough. For instance, after a brief dip during the COVID-19 pandemic, global CO2 emissions are again on the rise, reaching their highest level ever in 2023. In fact, just looking at the data, one would be hard-pressed to find compelling evidence on the effectiveness of the various UN Conferences of the Parties (COP) climate change summits that have sought to rally global collective action.
And yet, climate change, sustainability, and ESG have become key concerns in boardrooms and C-suites. Data collected by our colleague Simon Evenett and his team from US Securities and Exchange Commission filings by publicly listed companies, for example, show just how central these issues have become for corporate strategy. While eclipsed recently by geopolitics, the sharp increase in the number of times firms mention climate change, sustainability, and ESG over the past five years shows that something clearly has changed.
Why, then, has overall progress fallen short of expectations? At IMD, we work with leading global enterprises every day and therefore have a unique vantage point to gauge how companies are translating global goals into meaningful business model change. What we have heard over and over in our classrooms and in conversations with executives is that driving sustainability transformation is much harder than many had anticipated. Thatâs because, in addition to all the regular challenges of change management, sustainability leaders must confront nagging questions about the business case, engage a broad range of diverse external stakeholders, such as governments, NGOs, and communities, and frequently embark on systems change that, if successful, will benefit all players in an industry, including competitors.
Our conclusion is that meaningful and faster progress requires strengthening the leadership capabilities of sustainability champions, not merely their strategic acumen and mastery of practical tools. We are not the only ones to zero in on the centrality of leadership for sustainability. The World Business Council for Sustainable Development, the Stockholm Resilience Center, several foundations, and a number of global companies have reached a similar conclusion. That is why we have joined forces with them to embrace the Inner Development Goals (IDGs) as a necessary supplement to the already well-established SDGs.
Business leaders today face many complex problems of a kind that Heifetz et al (2009) call adaptive rather than technical. These are multifaceted problems for which there are no established models, no easy answers, and which can be difficult to understand by a single person. They therefore often trigger emotional reactions and require leadership to take actions to disrupt the status quo and navigate through the uncertainty to enable people to thrive. To tackle these challenges, leaders need to be emotionally intelligent, resilient, willing to engage in ongoing development and to collaborate with multiple stakeholders.
Engaging with the IDGs can help leaders adapt their approach to addressing sustainability by focusing on leading change. IMD, alongside a select group of other academic and institutional contributors, is a founding partner of the IDG Foundation, which brings together researchers and leaders from government, business, and civil society to evolve the framework and craft initiatives for leadership development to help achieve this.
The IDGs start from the premise that accumulating more knowledge about the climate crisis and other societal problems will not lead to the required level of action. Thus, simply investing in more think tanks, technologies, and policy instruments seems unlikely to resolve them. Instead, it is necessary to address the reasons that the existing targets are not being met. If the global strategy for sustainability can incorporate a focus on the inner drivers of action (and inaction), it is likely to boost the psychological, adaptive, and cultural capacity to work together towards the necessary transformation.
The IDG framework consists of five dimensions and 23 transformational skills that are critical for leaders to drive necessary change. These so-called âsoftâ skills are needed to capture already existing inner resources and help organizations turn them towards their ongoing sustainability efforts.
If the global strategy for sustainability can incorporate a focus on the inner drivers of action (and inaction), it is likely to boost the psychological, adaptive, and cultural capacity to work together towards the necessary transformation.
The concept of inner development has long existed across diverse cultures and societies, but this is the first time that inner development is seen as essential to address the increasingly urgent tasks identified in the SDGs. The framework has been co-created to identify, understand, and communicate the inner skills and qualities needed by people and organizations to achieve sustainable development for a more equitable world. The IDGâs five dimensions â being, thinking, relating, collaborating, and acting â along with the 23 skills and qualities are being increasingly recognized as an essential part of successful sustainability solutions. At a time when people are more digitally connected, yet also more stressed and less rested (Gallupâs 2023 Global Emotions report), there is a pressing need to cultivate inner skills as the foundation for dealing with the challenges of todayâs world. The IDG framework provides an overarching approach to focus on this inner development.
Such qualities are especially well-suited to tackling the adaptive challenges of the climate crisis, biodiversity threats, and the other existential issues facing the world that represent a complex mix of psychological, cultural, and political interdependencies.
The decision to become part of the IDGs initiative was driven by IMDâs ongoing commitment to developing leadership in sustainability champions within organizations. As part of the collaboration, IMD will incorporate the IDGs into its leadership programs and will launch an executive accelerator program anchored on the IDGs.
IMDâs focus on leadership development consistently underscores the dimensions of the IDGs with a focus on developing the presence, authenticity, and growth mindset of leaders.
The IDGs have already been successfully integrated into the leadership development frameworks of several corporations, including IKEA, Ericsson, Google, Stena, and Icebug.
The inherent flexibility of the IDGs can be seen in the wide range of ways in which these companies have chosen to partner with them. For example, the Inter IKEA Group introduced the IDGs across the whole organization, focusing on areas identified as producing the greatest potential value. This included developing the learning objectives of IKEAâs flagship leadership program based on a selection of relevant IDG skills.
Both ship operator Stena and shoe manufacturer Icebug took a comprehensive approach to introducing the IDGs to their employees, seeking employee support by announcing their engagement with the goals to the whole organization. Each of these companies also had the buy-in of senior decision-makers to leverage the IDGs to solve specific organizational problems.
Google, meanwhile, elected to engage deeply with the IDG approach, considering all the inner attributes and skills that make up the IDGs, but targeting only one department initially. The company has since broadened its use of the IDGs to other parts of the organization. Ericsson decided to embed the IDGs within its own established culture transformation journey, with a deeper dive in selected areas, such as the HR department.
IMDâs focus on leadership development consistently underscores the dimensions of the IDGs with a focus on developing the presence, authenticity, and growth mindset of leaders, encouraging them to think critically about issues through perspective-taking and sense-making, and encouraging leaders to connect through caring relationships and encourage bold action. It is IMDâs focus on developing these inner qualities and skills that our clients appreciate and makes us well-placed to be part of the guiding coalition of the Inner Development Goals to effect change for good in the world.
Swiss pharmaceuticals company Novartis is embracing the IDGs as the backbone of its âHealth Systems Awareness, Resilience and Transformationâ initiative. The COVID-19 pandemic has highlighted some of the huge challenges that health systems, major public health agencies, and healthcare leaders are facing, says Nina Bressler, Global Head of Societal Learning at Novartis.
Systemic problems such as decreasing levels of public and political trust, funding, and workforce challenges, threaten patient care and access to medicines. Changing demographics, greater demand, rapidly evolving technology, and information overflow pose additional challenges to systems, patients, and healthcare workers.
âThese complex challenges cannot be addressed by traditional ways of thinking and operating,â says Bressler. âWe are in a pattern of addressing adaptive challenges with outdated technical means. An unprecedented innovative systems approach powered by adaptive skills is needed to drive new outcomes, behaviors, paradigms, and systems transformation.
âThe Health Systems Awareness, Resilience, and Transformation initiative aims to create a unique space for dialogue between healthcare system influencers, the private sector, policymakers, and a continuously evolving body of stakeholders to understand the underlying systems dynamics from a different perspective. Taking a multidisciplinary approach, together with all stakeholders in the healthcare system, it seeks to co-evolve solutions to design deeply transformative interventions that help us to leap-frog into equitable, inclusive, resilient, and compassionate health systems.â
On 4 November 2024, IMD will launch a new open enrollment program Leading Sustainable Change, focused on leadership development for sustainability that is steeped in the IDGs. Led by Affiliate Professor of Leadership, Communications, and Organizational Change Susan Goldsworthy, the program is part of IMDâs Sustainability Accelerators, a highly innovative set of offerings that provide leaders and organizations with the capabilities and tools to accelerate ongoing sustainability transformations. The program is also a building block of IMDâs new Executive Certificate in Sustainable Business. The first IDG Summit will take place from 16-18 October 2024 and will feature a keynote address by Goldsworthy.
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