March 8, 2022 marks International Women’s Day, a day for celebrating the unique contributions of women in families, organizations, and society. This year, the occasion is especially poignant as women apply their skills and talents to COVID-19 crisis management and the development and implementation of plans for recovery. Sustainability lies at the center of these recovery plans, and women are playing an outsized role in it.
A direct proof point of this outsized role is the increase of female Chief Sustainability Officers (CSO). According to a 2021 Weinreb Group study, “women went from holding 28 percent of CSO positions in 2011, to 54 percent in 2021, a 94 percent increase.” Among females on Weinreb Group’s list of long running CSOs (CSOs with 10+ years in the position), Charlene Lake, AT&T’s Senior Vice President, Corporate Social Responsibility and Chief Sustainability Officer, is noted for her rigorous support of sustainability at AT&T. In a recent interview with Leaders Magazine, Lake made the connection between AT&T’s sustainability practices and the health of society:
“At AT&T, we have long believed a well-functioning society is fundamental to our business. The environment, equitable access to opportunity and education, and operational integrity are all common values we share with our stakeholders,” Lake said.
Proof of Lake’s impact was AT&T’s participation in the Business Roundtable’s August 2019 “Statement on the Purpose of a Corporation,” in which AT&T’s CEO, along with 180 other CEOs, signed a statement pledging to work for the benefit of all organizational stakeholders, including customers, employees, suppliers, communities, and shareholders.
Executive-level support for sustainability is critical for its success and female executives view supporting ESG as a means of strengthening customer relationships, and thereby generating tangible benefits (such as increased revenue) as a result. Indeed, as public awareness of sustainability grows, consumers are increasingly seeking out brands that consider sustainability a core value of their mission. This is especially true of younger consumers. According to Deloitte’s 2021 Millennial and Gen Z survey, “more than a quarter of millennials and Gen Zs said that certain businesses’ impact on the environment has influenced their buying decisions.” This increased concern over businesses’ social and environmental impacts has also filtered into the world of investing, where investors are actively seeking out funds that prioritize ESG. According to Morningstar (as cited in Reuters), global sustainable fund assets hit a record of $3.9 trillion in Q3 2021.
Executive women in accounting and finance (especially CFOs) wield tremendous influence in moving their organizations further in the areas of sustainability, including initiating discussions on how to achieve carbon neutrality in operations or in championing diversity, equity, and inclusion (DE&I) programs. According to McKinsey’s “Women in the Workplace” 2021 study, which focused on the challenges and successes of women in the workplace during COVID-19, “…women are rising to the moment as stronger leaders and taking on the extra work that comes with this: compared with men at the same level, women are doing more to support their teams and advance diversity, equity, and inclusion efforts.”
Female executive-level support of sustainability (inclusive of DE&I programs) has a direct link to firm performance, as research shows more gender diversity in executive-level positions translates into greater engagement by organizations in voluntary disclosures of information related to social and environmental impact. Researchers who studied the link between gender and sustainability engagement (with results published in the October 2021 issue Journal of Management and Governance) found the following:
“The presence of women in top echelon positions is associated with greater engagement in social and environmental projects. Their presence also positively influences the environmental and social performance and increases the level, quality, and transparency of sustainability disclosure. Furthermore, the presence of women in top echelon positions and the implementation of sustainable activities improve both the firm financial performance and value.”
(“Women in top echelon positions and their effects on sustainability: a review, synthesis and future research agenda,” Journal of Management and Governance, October 26, 2021)
These results show a strong commitment by female senior leaders in moving their organizations farther along the sustainability continuum. This will be increasingly important in light of the recent COP26 conference on climate issues, where the International Financial Reporting Standards (IFRS) Foundation announced a global baseline of sustainability disclosure would be ready by June 2022. Many predict 2022 will be the year sustainability reporting is embraced by accounting and finance, and women will be critical in this endeavor. IMA champions women’s leadership in areas like sustainable business management, and all aspects of financial reporting.
As we reflect on the many challenges and successes women have faced in this year, it is encouraging that on this International Women’s Day, major strides are being made by women in pushing forward ambitious sustainability goals. Women’s voices in advancing sustainability have truly made an impact, as more and more organizations connect their own health and profitability with that of society’s.