Senior executives and younger management talent agree that sustainability takes precedence over shareholder value. But they disagree on how to go about solving the problem. Fabian Buder and Nina Hesel discuss the results of a survey of present and future leaders. They write that it’s clear that businesses must transform and for that they need to make difficult decisions, even if it means sacrificing short-term gains to survive.
In an era marked by growing concerns about resource depletion and sustainability, it’s no surprise that the leaders of today and tomorrow are increasingly focused on these issues. Our research offers an insight into how young emerging leaders view the global challenge of resource scarcity. The study was targeted at the “leaders of tomorrow,” who are up to 35 years of age. They are a carefully selected, global group of young talent.
They, alongside senior executives from several of the world’s top companies, highlight a shared sense of urgency but differ in their approaches to tackling this pressing issue. The older group is composed of C-suite level and direct C-suite reports who are aged 50 and older and work for one of the top 3,000 corporations based on global rankings by revenue.
Both groups agree that companies should prioritise sustainability over shareholder value. However, they disagree on who should be held accountable, whether technology will be able to solve the problem and whether it’s time to pass the baton to younger managers.
Resource scarcity as a global challenge
There’s one thing on which both current and future leaders agree: The scarcity of natural resources is a major global problem. The report reveals a strong consensus across generations that addressing this issue is crucial, even if it means slowing down economic growth temporarily. Of the leaders of tomorrow and senior executives surveyed, 81 per cent and 72 per cent, respectively, believe that conserving natural resources is paramount, even if sacrifices in economic progress are required.
This shift in mindset marks a critical moment. For decades, growth at any cost has been the default approach for businesses worldwide. But today’s younger generation is pushing back, insisting that long-term sustainability must take precedence over short-term financial gains. This isn’t just about corporate responsibility; it’s about the future of the planet.
Figure 1. Strong agreement on the need to conserve natural resources
Notes: The numbers are percentages of cases that agree with the left or the right statement, respectively. Leaders of Tomorrow n = 650. Senior executives n = 250.
From shareholder to environmental value
One of the most striking findings from the report is the call for companies to drastically reprioritise their goals. The majority of the younger respondents believe that businesses should prioritise social and environmental value over shareholder profits. In fact, 88 per cent of future leaders think that companies currently focus on creating shareholder value and clearly prioritise it over societal and environmental impacts of their actions, whereas 83 per cent state that businesses should rebalance their goals to prioritise sustainability. This sentiment is largely echoed by today’s executives which suggests a growing recognition that companies can no longer afford to pursue profits at the expense of the environment. However, there is still some resistance among the older generation, with a small but significant portion of senior leaders remaining focused on shareholder value (32 per cent).
Who should lead the change?
While both generations agree on the urgency of the problem, they diverge sharply when it comes to taking personal responsibility. A large percentage of the young leaders of tomorrow (63 per cent) argue that executives should be held accountable for their company’s sustainability goals, suggesting that bonuses and rewards should be tied more closely to environmental outcomes than to financial performance. In comparison, only 32 per cent of senior executives agree with this approach, highlighting a gap in how the two generations view accountability in leadership.
This difference in perspective reveals a critical challenge for companies that aim to drive sustainable change: Without clear accountability and personal responsibility at the executive level, lofty sustainability goals may remain little more than rhetoric. Tomorrow’s leaders are calling for real action, not just talk.
Less optimism about technology “silver bullets”
Another key difference between the two generations lies in their views on the ability of technology to solve the scarcity problem. The leaders of tomorrow are much more sceptical that solutions for tackling natural resource scarcity will be found in time to avoid a collapse of global systems. Furthermore, results indicate that the leaders of tomorrow are much less optimistic of technology’s ability to overcome the Earth’s limited natural resources than the older generation of leaders are.
Figure 2. Can technology solve the problem?
Notes: The numbers are percentages of cases that agree with the left or the right statement, respectively. Leaders of Tomorrow n = 650. Senior executives n = 250.
This “optimism gap” may indicate that the leaders of tomorrow are urging a broader rethink. For them, the answer might not just lie in technology but a systemic change in how resources are used and consumed. It’s a sobering reminder that faith in technological fixes may not be enough to avert disaster if deeper, structural changes aren’t made.
Transforming business models
Where both generations do agree, however, is on the need for businesses to rethink their models in response to scarcity. A majority of both future leaders (72 per cent) and senior executives (69 per cent) see natural resource scarcity as a catalyst for sustainable transformation, pushing companies to innovate and explore new ways of operating.
This shift is already underway in certain companies, where leaders are exploring more sustainable business models that reduce resource consumption and focus on long-term environmental impacts. However, the report suggests that far more needs to be done. Incremental changes, like improving efficiency or using cleaner technologies, won’t be enough. The leaders of tomorrow are calling for a fundamental rethinking of how businesses operate, from supply chains to product lifecycles.
Bridging generational gaps in leadership
Despite these shared goals, the report also highlights a growing tension between the two generations on the issue of leadership. The leaders of tomorrow are eager to take on more responsibility, but they perceive a reluctance among current executives to pass the baton. At first look, both generations seem to agree that intergenerational collaboration is essential for sustainable change. When it comes to handing over decision power, however, the leaders of tomorrow see a large gap between their own willingness to take over responsibility and that of the older generations to pass it on. Current leaders themselves, by contrast, see no such discrepancy at all, which carries the risk of conflicts and misunderstanding that could ultimately hinder the intergenerational collaboration for which both parties aim.
Figure 3. Willingness to hand over responsibility
Notes: The numbers are percentages of cases that responded with “strongly agree” or “agree”. Leaders of Tomorrow n = 650. Senior executives n = 250.
This disconnect poses a real challenge. If companies are going to successfully navigate the transition to a more sustainable future, they will need to bridge this gap and find ways to collaborate across generations. The report suggests that, from the perspective of the leaders of tomorrow, creating formal structures for cross-generational dialogue, such as mentorship programs or advisory boards, could be ways to foster greater collaboration.
The path forward
Ultimately, the report offers a powerful call to action. It’s not enough for today’s leaders to acknowledge the problem; they need to act on it. This means more than just talking about sustainability; it means making real, difficult decisions that may involve sacrificing short-term gains for long-term survival.
The leaders of tomorrow are clear in their message: Businesses must transform, not just tweak their operations. This transformation will require bold leadership, innovative thinking, and a willingness to break from the past. Senior executives must be willing to listen to the younger generation, who will soon inherit the mantle of leadership. Together, they can forge a path toward a future that balances economic growth with the preservation of our planet’s most precious resources.
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- This blog post is based on Confronting Scarcity, a Voices of the Leaders of Tomorrow 2024 report, Nuremberg Institute for Market Decisions.
- The post represents the views of the author(s), not the position of LSE Business Review or the London School of Economics and Political Science.
- Featured image provided by Shutterstock
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