Why the best entrepreneurial leaders consider inclusion and sustainability

Entrepreneurs today have a major opportunity to build viable, high-growth businesses by embracing inclusion and sustainability practices.

In brief

• The best entrepreneurial thinkers are building inclusive, purpose-driven business environments.
• Leaders have a major role in developing people, driving growth and pushing boundaries to make a better world.
• Taking on sustainability initiatives is associated with positive business results. 
  

According to a December 2022 World Economic Forum report,¹ entrepreneurial leaders are the backbone of worldwide economies. They’re also beacons of change when it’s needed most. With four years of progress toward the UN’s 17 Sustainable Development Goals wiped out due to COVID-19, according to a 2022 UN Sustainable Development report,² there’s a major opportunity for entrepreneurs to identify and implement solutions while leading companies that embrace inclusion and sustainable business practices.

That means building viable, high-growth businesses while considering people and the planet. The best entrepreneurial thinkers are building these critical considerations into their businesses from the start — and their actions are inspiring positive change across the business landscape at large.

“Entrepreneurs are at the heart of progress,” says Cheryl Grise, EY Americas Industry and Solutions Leader. “We conducted a study that showed over every recessionary period, an increase in startups, entrepreneurial spirit and new levels of innovation that solve big problems.”

New levels of innovation can emerge within any organization, at any rank. Even at large corporations like Dow, Inc., a 125-year-old company, leaders are acknowledging how big-picture global issues tie to business stakes.

“Sophisticated investors would look at an industry like ours and say, ‘If you don’t address sustainability, there’s a tail-risk financially on your company,’” Jim Fitterling, Dow Chairman and CEO, noted at the Strategic Growth Forum® in November 2022. “Over time, people will either deselect your industry, or they’ll just move their investments completely to other alternatives.”

For sustainable, inclusive growth, then, it’s up to leaders — new or established — to foster a culture that encourages the open sharing of ideas, the centering of key threats such as climate concerns, and the nurturing of talent from all walks of life.

The new sustainability imperatives

For entrepreneurs and business leaders, it’s common knowledge that “doing good” — including taking on sustainability initiatives — is associated with positive business results. According to EY research, 80% of organizations see share performance improvement when they have sound sustainability practices, and 90% of sustainability-committed companies see a lower cost of capital. At the management consulting firm Indelible Solutions, CEO and Cofounder Joshua Hay considers such practices indispensable: “They provide the fundamental, core concepts that you must execute on in order to continue growing the business.” In other words, they’re the very foundation of company growth.

But there’s a gap between promise and progress when it comes to sustainability and other environmental, social and governance initiatives. A November 2022 EY report shows that business leaders and investors disagree on whether meaningful improvements are taking place and whether developments are being shared transparently. Per an EY survey, about three-quarters of investors want organizations to prioritize these commitments, even at the expense of short-term financial gain — but more than one-half of business leaders disagree, saying they’re held back from progress due to investors wanting immediate gains. Furthermore, one in five leaders claim investors are “indifferent” to long-term promises, including sustainability work.

Fitterling avoids corporate finger-pointing. “[Our] projects have to be profitable and low-carbon, [and] it’s not a question of either/or,” he says. “I don’t think the market is going to give a company at our age a pass.” Dow is working toward decarbonization, and Fitterling says investors are only asking to go faster. Some of the company’s current initiatives include creating, in Canada, the world’s first ethylene facility with no Scope I or Scope II greenhouse gas emissions. From there, Dow will convert an existing facility into a zero-emissions operation. The company is also pushing for stronger curbside recycling programs nationwide, working with organizations such as the Recycling Partnership. “[We have] a detailed path to 2050, [with these types of] projects all along the way,” says Fitterling.

Veronika Stelmakh, CEO of Mesodyne, offers a power generator that can use light to transform any fuel into electricity. “We have to create a sustainable future,” says Stelmakh. “And it’s the choices we make as businesses and the choices we make as individuals that are going to preserve our beautiful planet for many generations to come.”

Diverse ideas drive growth

Encouraging fresh ideas is critical, as is uniting behind specific goals that are purpose-driven. According to the EY CEO Imperative, core purpose and strategy must be reimagined amid today’s drive toward stakeholder capitalism — and a company’s people must be central to everything, from sustainability initiatives to revolutionary tech to workplace culture. When that’s done, everyone benefits: EY research shows that companies with clearly defined, purpose-driven goals outperform the market by 5% to 7% annually.

Fitterling says several Dow initiatives, including “Rise” for new employees and “Prime” for employees ages 50 and up, produce groundbreaking ideas that lead to new product lines, sustainable practices and growth. “These programs open the aperture — we get different ways of thinking from a cross-section of the world,” he says. “That’s really where the business value comes from.”

Fitterling has been at Dow for nearly four decades, and throughout his tenure, efforts to support employees and their ideas have continually evolved. But in 2014, having been diagnosed with Stage IV cancer, he reflected on how he was personally showing up to work. After nervously talking to Dow’s board members, he went on camera to address every employee — and told them all he was gay.

“What I learned after I came out — and especially doing it on a webcast in front of all Dow employees — [was that] the support was through the roof. And if I did it again, I would do it sooner in my life,” he says. “The biggest thing that drove me was not just telling my own story, but imagining how many young people in the Dow organization might have been in the closet. And maybe they knew I was [gay], but I wasn’t out, [and they’d think,] ‘Why would I come out?’ The conversations we started to have about inclusion after that were very different and very real, compared to some we had before that.”

Echoing the importance of a diverse workforce, Lisa Williams, CEO and Founder of World of EPI, and Indelible Solutions’ Hay both say that recognizing each employee’s talent and investing in it is key to growth. Hay notes, “We try to maximize human potential. We’re identifying those individuals who have the experience [for a role] but may not have the educational background to [meet the qualifications on paper]. We marry that with a training program that’s going to bring them up to speed and close that gap.”

“Recognize there’s a gap, and then use all your resources — financial and human — to make sure that workflows run smoothly to create profit,” says Williams, whose toy brand helps build children’s self-esteem by making dolls of all skin tones. “Profit should be reinvested in the employees, in the climate and in the community.” That action, notes Williams, creates a cycle of value and inclusion.

It’s clear that entrepreneurial leaders have a profound role in developing people, driving growth, and pushing boundaries to make the world a better place. Grise affirms, “When we look for better questions in today’s environment, they come from entrepreneurs. Every time we can get a question from them and work with them on that answer, we find that we create a better working world.”