Has the world gone sustainability mad? Is this just another ‘thing’ that corporations have to be seen to be doing? Or is there a more fundamental driver behind ESG and Sustainability? The rise of the Chief Sustainability Officer has been one of quickest ‘new’ c-suite roles that has come to the fore and well and truly entrenched itself as a must-have role. The question is though – do you need a Chief Sustainability Officer?
Of course, the answer to that question is contextual. An SME business would struggle and therefore, the ‘function’ of a sustainability officer would invariably fall to the CEO, owner or other member of staff as an adjunct to their primary responsibilities. However, for larger, international and national organisations and corporations, the answer is an emphatic ‘yes’.
The commonly held perception of a responsible business is one that has strong Environmental, Social and and corporate Governance (ESG) credentials. The environment/climate impact is quickly becoming the primary area that companies are being exposed to and this has a direct impact on their social standing, authority and reputation as a contributor to civil society.
The reporting landscape for ‘sustainability’ is varied and complex. There is no standard reporting format, but the expectation is there by financial institutions, pension funds, shareholders and society at large that corporations and organisations are able to clearly demonstrate their impact on the environment and ‘Net Zero’ plans and progress.
"What they decide and drive for the organisation affects all parts of that company."
A transformation role
The Chief Sustainability Officer was never heard of less than two decades ago. In fact ,according to an article in FORBES, the first known Chief Sustainability Officer appointed as an Executive member of a corporation was Linda Fisher at Dupont in 2004! Fast forward to 2021, in the US there has been a threefold increase in hiring to the CSO role. If you need any further proof of the rise of sustainability as a function, a search on LinkedIN for jobs that have ‘sustainability’ as a specific term of the title returns 29,000 current opportunities across EMEA! It is a critical aspect of business strategy and operational decision-making, which needs to be embedded in the corporate DNA through a transformative process.
The role of the CSO seems to be an ever expanding and influential role. The multiple sustainability and social impact challenges organisations now face require someone who can navigate these all too choppy waters. The external environment is intensifying scrutiny from stakeholders, fuelling an ever-greater focus on Environmental, Social, and corporate Governance (ESG) risks.
The COVID-19 pandemic has brought this into sharp focus, yet despite this and the impending COP26 meeting and the recent IPCC report on the climate crisis, many companies are still trying to come to grips with how to integrate sustainability as a true enabler for business growth. A major perceived threat seems to be that they don’t have ‘market expected’ policies and targets around sustainability and therefore, the issue of ‘transparency’ becomes too much of an opaque conversation!
More than that, the role of the CSO is a transformation role. What they decide and drive for the organisation affects all parts of that company. In a recent forum during my time with the Oxford Said Leading Sustainable Corporations course, a question was posed to me: “what roles in an organisation are more likely to be appointed to a CSO and what roles do I think should be appointed to a CSO role?”
This was an interesting question. In all transformations, the success of realising the desired outcomes of a transformation generally rests with 20-30 people, depending on the size of that organisation. At 6 Group we put those people into 3 Pivotal Position groups – the Innovators/Disruptors; the Enablers and the Policing/Protecting group. Traditionally, the thought of sustainability (environment and health & safety) has been regarded as a compliance/risk-based role. Therefore, you have seen a large community of Risk and Compliance executives be given the “sustainability” role.
However, culturally this does not always help shift the dial of a transformation. Instead, you see those functions invariably be forced into a compliance/regulatory and policy-based role where the leader of the function almost has no choice but to be seen as a "blocker"of progress rather than an enabler.
We put a different lense on who to appoint to the CSO role. Using Organisational Network Analysis, we looked at those people within an organisation that had extensive networks across the group. Those that had a track record of cross-functional change and project management. They had a direct appreciation of operations, finance, sales, risk, strategy and, in particular, HR. To be fair a rare beast indeed! They were people that were able to influence both at a board level and at the shop floor level.
Dual hatting the CEO role
Looking further into the behaviours of those executives, we could see that their default response to new (or even perceived radical) suggestions was not met with a ‘no’ or a compliant push-back, but rather they were firmly in the ‘enabler’ camp of looking and assessing at ‘how something could be achieved’ and what the impact of that would be on the organisation. It was these people that were able to achieve a heightened awareness and followership in understanding the commercial imperative of Sustainability throughout the organisation.
Just to make things a bit more complicated, the sustainability function is learning quickly and becoming more and more commercial. Moreover, the economics of sustainability is now becoming a critical impactor of the fortunes and failures of business. The CSO has to be a strong external networker. They need to be the one person that is ahead of the whole organisation in what is the latest on global reporting methodologies, the latest in carbon removal technologies, political and social influencing. In many ways, the CSO is almost dual hatting the CEO position.
We will only see the role of the CSO rise in both prominence and importance. As countries, political parties and society as a whole bring their expectations for companies, their employers, the products they buy, to demonstrate their sustainability credentials, we will see sustainability become a primary pillar of success and growth for all companies.
The CSO is here to stay. They need to bring vision, passion and purpose to the executive team. They will be a driving force in shaping and delivering the organisational transformation that every company will need to survive and bring some clarity to this all too volatile, uncertain, complex and ambiguous world we live in.
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