WOMEN’S EMPOWERMENT AS A SUSTAINABLE BUSINESS STRATEGY
AN EXPERIENCED BUSINESS strategist and sustainability addict Ravi Fernando sees women’s participation in business and political leadership as an essential requisite for sustainable economic growth, the world’s best shot at saving its own future while making profits.
Why could women be the key and how do they set themselves apart?
Sometimes mistaken for corporate social responsibility (CSR), sustainability completely transforms the way of doing business. Companies that adopt the concept go from doing business at the cost of society and the environment, to working for its sake. They understand the social and environmental risks, and incorporate them in their planning and decision-making. If done correctly, this shift can bring considerable savings, profits and an improved brand image. The world’s largest and most successful companies like Google and Apple have embedded sustainability, and many of them are moving towards using 100% renewable energy.
“Companies in Sri Lanka still think that CSR or sustainability is just a small part of the story.” Considering the severe effects of global warning on Sri Lanka over the past few years, local companies should be among the pioneers of sustainability in business. Especially since the most important sectors, including apparel and tea production, heavily depend on water supply. Although going sustainable requires an initial investment, it brings long-term results. Fernando stresses that sustainability is not a cost increase, but a cost saving. From his experience, he says it takes a sustainability-minded leader to make a successful move from the usual profit and shareholder value creation focus to long-term, planet-friendly goals. If the board and management do not understand, there is little chance for a successful transition.
What can women do to help?
Once a company is serious about embedding sustainability in its strategy, gender diversity should be next on the list. Not only because it’s the right thing to do, but because it’s good for business.
“By nature, women are more open to the concept of sustainability than men. A woman is much more likely to be sensitive to the world’s social and environmental issues.” It is the right level of natural, feminine sensitivity that gives women a competitive edge, a pole position to gain a valuable skill set they can bring to the table.
In many cases, women who rise to leadership positions adjust their behaviour to match their male counterparts. In order to appear tougher, they suppress their natural feminine qualities. Fernando argues that such a transformation is unnecessary because it discounts the point of gender diversity. “Women must be true to themselves, they must remain who they are.”
Gain knowledge and leadership skills
Of course, an inclination towards sustainability doesn’t qualify women for senior positions, neither does it ensure tangible results. Training and advanced education is needed to make a difference. Fernando believes sustainability should be taught from childhood and included in all business curriculums at universities, for men and women alike. However, considering the global underrepresentation of women in boardrooms and higher levels of management, he believes this might be an opportunity for women to get ahead and gain a valuable set of skills that will be in high demand in the future. “The women’s ministry could organise sustainability courses and training sessions for women in leadership. If guys are not interested, women will become more valuable.”
Since very few women are groomed for senior positions from the start of their careers, their education and experience tend to exceed their leadership competencies. Without proper training in management, the inclusion of women cannot bring results. That is why mandatory quotas can be considered a short-term, ineffective solution unless it is matched with relevant education and skills training.
Aim for the boardroom
Globally, women hold about 50% of middle management positions, but according to the MSCI World Index, only 18% of all directors are female, and 8% in emerging markets. What is even more alarming, a study from 2014 estimated that women make up a mere 3% of board chairpersons worldwide. Although there is no direct connection, Fernando points out that, incidentally, it is also 3% of listed companies in the world that report sustainability.
If that isn’t enough motivation to bring women to boards, the promise of higher returns might do the trick. According to an IFC report, research indicates that companies with at least three female board members report greater total return to shareholders, return on capital invested and return on equity. “In 2007, Fortune 500 companies in the top 25% of female representation reported a 66% higher return on capital invested, 42% greater return on sales and a 53% higher return on equity.”
Once they gain the right skills to function in boards, women can become indispensable leaders in forward-thinking, sustainable organisations; Fernando believes they won’t be waiting for long. “In the next three to five years, many businesses will be in deep turmoil and crisis due to climate change. Soon, leaders will have no option but to hire people who understand the reality of sustainability and bring them on to boards.”
The Story of ‘Women Go Beyond’: An innovative business strategy
‘Women Go Beyond’ is a successful women’s empowerment programme that has been running at MAS since 2003. It supports female workers, working mostly in apparel factories, in three areas: career advancement, work-life balance and rewarding excellence. Few people know that the programme was merely a strategic solution to a business challenge.
Everything started with the simple question. “How do we set ourselves apart?” In 2003, when Fernando joined the company, the apparel industry was facing an impending crisis. The World Trade Organisation was going to abolish its quotas that ensured enough orders for all involved in developing countries. Suddenly, the lowest-cost producers, like China, India or Bangladesh, were likely to attract all business.
Thanks to Fernando’s idea, MAS found a way out. By differentiating Sri Lanka from its competitors and presenting MAS as a socially sustainable brand, it won the interest of major clothing brands and received many awards in years to come. The success of ‘Women Go Beyond’ was built on two things: social responsibility and a powerful branding campaign.
About Ravi Fernando
Having worked in senior positions for large multinational companies, including Unilever and Smithkline Beecham, across Asia, Africa and the Middle East, Fernando knows the corporate world inside out.
Before ‘Women Go Beyond’, he ran companies to make profits. After the programme, sustainability became his passion and obsession. He is an alumni of the University of Cambridge and the European University, currently teaching courses on sustainability as an executive in residence at the INSEAD Social Innovation Centre. In 2018, he will be a mentor in an international Global Women on Boards programme, aimed to train and prepare women to function in boardrooms around the world.