ESG, eIQ and the Courage of a Leader
The Values of Sustainability Require Ethical Intelligence and Courage
ESG Matters to Today’s Employees
We all know that the world faces an array of big issues, tensions, and dilemmas due to human’s excessive consumption habits and global inequalities. Because of the variety of global and societal challenges, Environmental, Social, and Governance (ESG) initiatives have emerged to enable organizations to demonstrate their commitment to sustainable growth. ESG represents a new lens through which investors, employees and other stakeholders view a business. ESG initiatives resonate with today’s employees as they raise the profile of the organization as being a good corporate citizen. These programs are also paying off in terms of more satisfied employees that work harder to produce positive results for their organizations. The moral focus of ESG is proving to yield positive impacts on employee well-being as it creates a genuine sense of attachment to the individual’s role and the organization’s purpose and goals. Employees relate to the idea of “doing good while doing well” as being an integral part of their everyday activity and job satisfaction. ESG programs respond to the interests of the growing composition of Millennials and Generation Z’s that comprise today’s workforce. By 2029, the Millennial and Gen Z generations will represent over 70% of the world’s workers. These generations tend to have greater environmental and societal concerns than previous generations. Organizations knows that enthusiastic employees who seek both success and significance will represent a crucial segment of their human capital. The leadership challenge is to take a closer look to understand how ESG initiatives can play a more pervasive role in attracting, engaging, and retaining its Gen Z talent, while satisfying the rising demands of this demographic as consumers of products and services.
The Rise of Ethical Intelligence
As all living organisms evolve, they get more complex over time. Our world is no different in how its subsystems evolve and interact. To help navigate the complexity of today’s issues the concept of Ethical Intelligence (eIQ) has emerged. eIQ is the ability of humans to courageously make ethical decisions through principled thinking, choosing, and behaving when faced with moral challenges. The eIQ of an organization’s leaders and followers can literally be the difference between survival and failure of ESG programs. Research reinforces the eIQ concept as we know that what we believe as an individual shapes how we behave, and how we behave is what we become, through our decisions and actions. In this context, eIQ represents the leader’s awareness of the ethics they embrace in their private, public, and business lives. It represents their ethical functioning across areas such as ethical awareness, judgment, and action. Ethically intelligent leaders continually grow their competence in questioning, processing, and responding to ethical issues. They practice ethical sensitivity, ethical reasoning, ethical decision making, ethical reflection and principle-based care. A leader’s eIQ is a cornerstone that engenders a variety of positive side effects for employees. Research shows that followers of ethically intelligent leaders feel like they have more control over their jobs, and their work is more meaningful. These employees tend to take more initiative, put in discretionary effort and are more willing to help others and avoid unproductive conflict. The bottom line is that employees who feel they have a true North Star for ethical leadership are more satisfied with their leader, have a better attitude and are more dedicated and engaged in their work. Leaders with strong eIQ act as a role model in improving their own range of ethical competence, while developing the ethical strengths of others.
Courage Enables eIQ and ESG Transformation
When it comes to ESG and eIQ you can take a quote from Lao Tzu who said, “The best way to do is to be.” Ethically Intelligent leadership supports ESG initiatives through the ideas of “being” and “doing.” It takes courageous leaders to model the ESG virtues that an organization embraces. Leaders are the ones who can inspire those around them to behave ethically against real world day to day constraints and operational challenges. When organizations agree on what they aspire to “be,” their employees can’t let the urgency of a moment get them into implementing a “do” that conflicts with ESG values. This is where the courage of a leader steps in to reinforce the power of ESG frameworks to guide ethically intelligent leadership. Ethically Intelligent leaders are those that can immerse themselves in “being” in line with ESG values even under the pressures and context of real world “doing.” The act of “doing” often requires ethically intelligent leaders to show the moral courage to uphold their values and objectives to “do what is right” even in the face of significant pressures, adversity, or risks. They prevent or reduce ethical tensions and moral distress across the organization by respecting others’ individuality, acting confidentially, and having a sensitivity to competing values and principles. In leading ethical resolutions, they ensure all selected decisions are courageously implemented with a willingness to identify the needs of ESG values and the human beings impacted. Courageous leaders with high eIQ are willing to admit their mistakes, absorb criticism and create psychologically safe environments for making tough choices. They are highly sensitive to and adept at managing dilemmas that are viewed as gray areas where ethical standards do not prescribe a clear course of action. Moving an ESG program from compliance to courage requires ethically intelligent leaders.
Courageous Leaders Know Blind Obedience Serves No One
One of the greatest influencers of “being” and “doing” across a workforce are factors that relate to obedience. Obedience to authority is the tendency people have in wanting to please those in charge. Courageous and ethically intelligent leaders know the dangers of blind obedience. Obedience left unchecked can lead followers to fail to exercise their own independent ethical judgment. This phenomenon produces unfortunate consequences when leaders use their authority to coerce followers or when they lack ethical conviction themselves and fall to pressure they experience. When building an ethically intelligent culture, leaders must recognize that the power of authority pressure can be extreme when it comes to influencing ethical choices either positively or negatively.
Milgram's Famous and Controversial Experiment
To reinforce the relevance of the concept of obedience of thought, leaders can look to an early 1960’s set of experiments that revealed the power of obedience to authority. The classic study involved participants believing they were administering dangerous electric shocks, some of lethal strengths, to another person. The study, while controversial in approach and findings, showed the power of authority in obedience. The results revealed that 65% of the participants in the study delivered the maximum shocks. The Milgram experiment, as it was called, suggested that people are highly influenced by authority, and highly obedient. Knowing that over 60% of followers can be potentially influenced to the extreme by authority, courageous leaders must grasp the idea of how far some people will go to follow an order.
ESG and eIQ as a Workforce Strategy
ESG will come to be seen as a compliment to workforce strategy as the relationship between ESG leadership, performance and workforce sentiment grows as a source of competitive advantage. The courageous leader has a profound role to play in enabling an organization’s ESG program to serve as a force for good. Leaders are placed in a position of influence to leverage their ethical intelligence competence and to put the social or human factor at the heart of “being” and “doing.”
Moving ESG and eIQ Forward
The value of strong ESG programs will grow as they empower workers to better connect to their organizations and serve as an influential factor for improving overall employee satisfaction, well-being, and retention. These programs play a clear role in defining a company’s identity by creating a strong social and emotional signature. The collective awakening and desire to make meaningful social and economic contributions will continue to mature ESG programs as the norm to doing business and grow the mindset of ethical intelligence in every corner of the organization.