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A company’s carbon footprint is planted firmly on its bottom line

This column is part of Globe Careers' Leadership Lab series, where executives and experts share their views and advice about leadership and management. Follow us at @Globe_Careers. Find all Leadership Lab stories at

Whether or not you believe that humans are responsible for global warming, there can be little debate that our planet's climate is changing.

As a recently released scientific report by the Obama administration pointed out, severe weather as a result of climate change is having an impact on us now.

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Dealing with our changing climate and the damage it causes is a key leadership challenge, not only for the future, but today, as the U.S. National Climate Assessment underscores.

The reality is that environmental considerations are becoming increasingly critical to corporations and their bottom lines. And business leaders who ignore the growing importance of "going greener" – not just taking steps to be seen as such – do so at their peril.

Just look at how environmental concerns recently affected two major oil pipeline projects tied to Alberta's oil sands – Enbridge's Northern Gateway and TransCanada's Keystone XL. The community of Kitimat, B.C. spoke out against Northern Gateway in a recent plebiscite, putting another obstacle in the path of the $7.9-billion project, which got the green light from the federal government only recently.

TransCanada's proposed Keystone XL pipeline from Alberta to the U.S. Midwest has been hobbled by similar fears over what it will do to the environment.

Or consider the move recently made by Exxon Mobil: The world's largest international publicly traded oil and gas company relented to investor pressure and announced it will disclose to shareholders how stricter emissions regulations could affect the value of its oil and gas assets and the company's plans for operating in a carbon-reduced future. It's an example of how organizations in Canada and around the world are increasingly disclosing their environmental risks and impact, and their strategies on how they are managing climate change.

As companies navigate what is considered by many to be an environmental crisis – the changing of our climate and the depletion of critical resources – they must change the way they do business.

The carbon footprint left by corporations has stepped out from the sidelines of social responsibility policies and is now planted firmly on their bottom lines. Carbon reduction will become essential to market competitiveness. Organizations from all sectors will need to embed environmental awareness into their processes and decision-making in order to create a culture that minimizes their impact on the environment.

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While Exxon Mobil's new reporting speaks to the importance of environmental considerations to investors, employees and customers are also putting much greater value on all things green. For a growing number of them, environmental sustainability is factoring more heavily into their decision-making on where to work and, as consumers, where they exercise their purchasing power.

Remodelling an organization along more sustainable lines is complicated and requires far more strategic agility. At the same time, companies will have to juggle competing goals to reconcile their commercial, economic, ecological and social aims. Whether leaders like it or not, boardrooms are becoming more crowded with many stakeholders demanding to have a say in how their business is run. After all, we all share the same, increasingly crowded planet.

All of this change will have to begin at the top. Leaders will need to introduce the change, implement it, find the partners to help them and communicate it to their work forces. And their role advocating for environmentally responsible business practices must extend outside their organization to their broader communities.

Leaders can't just take actions with a financial filter in mind, they also need to include an environmental filter and a community filter. New forms of collaboration with more eco-effective, leading-edge companies – even competitors at times – will be vital.

The pressure to do the right thing for the planet and the business is bigger than any single organization. However, in the long run, organizations that pay attention to this end up being more profitable – they operate more efficiently, reduce waste, and spend less money trying to attract the best talent because the best talent wants to work for them.

Rick Lash is the national director of the leadership and talent practice for Hay Group (@HayGroup) in Canada, the company behind Leadership 2030: The Six Megatrends You Need to Understand to Lead Your Company in the Future, written by Hay Group consultants Georg Vielmetter and Yvonne Sell, and published by Amacom Books, a division of the American Management Association.

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