“Sustainability is too important to leave to our chief sustainability officer. It needs to be owned by everybody in the management committee if we’re going to be effective.”
—–Michael Froman, Vice-chairman, and president – Mastercard
In the famous William Shakespeare play “Romeo and Juliet,” Juliet utters the words, “What’s in a name? That which we call a rose/ By any other name would smell as sweet.” In this line, Juliet submits that a name is nothing but a name, which is a convention with no meaning behind it. Could this be the case with the title “Chief Sustainability Officer (CSO)”?
The title first and foremost, and then role and functions of the Chief Sustainability Officer (CSO), is one of the current hotly debated topics in sustainability. The Chief Sustainability Officer title covers several titles reflecting a prominent board director or officer whose prime responsibility is integrating sustainability into an organization’s core strategy and operations. The CSO reports directly to the Chief Operating Officer (CEO) and is often a part of the Executive Management team. The Chief Sustainability Officer (CSO) places sustainability with a select group of internal functions that make up the executive decision-making team, dramatically impacting sustainability strategies’ credibility and robustness.
Approximately five years ago, the title of Chief Sustainability Officer surfaced in the United States, and after the title is increasingly being adopted globally. This position is regarded as a necessary appointment with businesses as it evolves from viewing sustainability as corporate social responsibility (CSR) concern to a core strategic issue and a key driver of business innovation. Historically, senior corporate executive positions are often created in response to significant opportunities and risks emerging from technological or societal disruptions. Examples represent the creation of Chief Technology Officers (CTOs), Chief Information Officers (CIOs), Chief Quality Officers (CQOs), Chief Financial Officers (CFOs), and now the Chief Sustainability Officer (CSO). But, equally, it must be understood that the role of the CSO is still evolving and undergoing metamorphosis.
The imminent evolution
The advent of the Chief Sustainability Officer (CSO) job role reflects the evolution of sustainability as a strategic matter for many businesses. Sustainability arose as a significant business issue in the 1990s, mainly preserving the CSR role within a corporation. However, the impact of business activities on their community, environment, and employees were increasingly recognized. As a result, corporate Social Responsibility (CSR) departments were tasked with implementing a strategy, complying with relevant policy and international standards framework, and communicating with important stakeholder groups. Consequently, businesses and multi-national organizations have deployed a dedicated ‘sustainability role’, often spearheaded by the Head of Sustainability. This model remains the case for the majority of companies until now.
The appointment of the Chief Sustainability Officer to the Board is a crucial feature in defining the role of the CSO as someone whose dedicated responsibility is ensuring a company can navigate sustainably in the ever-changing and quicksilver business environment. Furthermore, the Chief Sustainability Officer (CSO) is to drive the formulation and execution of an organization’s sustainability strategy. The number of CSOs has also grown substantially over the past few years, and while the growth has leveled off, companies are continuing to create and fill these positions. For example, the number of companies with a full-time sustainability officer doubled between 1995 and 2003 and 2003 and 2008 (Greenbiz 2013).
Does this mean that the light bulb has finally been switched on, and the businesses are smelling the coffee concerning taking sustainability out of the ‘vertical silos’ and embedding it in their core strategy? The appointment of a board-level representative in the form of a CSO, who understands the future issues and sustainability trends that will face the company, is the first step to this “new enlightenment.” Optimistically, this will also mean more demand for CSOs and upsurge the opportunities for professionals in the CSO role to use it as a springboard to the CEO role. But, as with any change, some embrace it and those who fear it.
What does it take to be a CSO?
So let’s attempt to discern what is required to become a Chief Sustainability Officer (CSO). In it’s brief existence, a Chief Sustainability Officer is portrayed as a larger-than-life figure with almost superhuman skillsets and personal characteristics. However, upon close examination of their job descriptions and terms of reference, it is clear that there is a common thread between that of a CEO and some other board-level appointees.
Chief Sustainability Officers (CSOs) are appointed for their combination of knowledge of operational and business matters, clever procedural tactics, understanding of change management, and ability to make things happen within a company. These are defining differences from the traditional role of the Head of Sustainability, where understanding sustainability is typically the key criteria. The CSO will generally have several sources for knowledge of crucial issues, going beyond their direct reports in the ‘sustainability function’ to external stakeholders, international professional bodies and institutions, and even academia.
One of the crucial elements in the CSO’s ascendence to leadership is their ability to gain the respect and trust of the Executive Management team and company Board. The CSO, working with the Board, will typically focus on two areas of strategic importance: their remit will be to explore activities that will make a significant difference to shareholder value while reviewing the company’s management of its impacts and risks to reputation. On the opportunity front, they will look for initiatives that, on their own or in total, represent a strategic opportunity and that it is sustainable.
Ultimately, organizations that hire a CSO envisage substantial strategic and commercial advantage through their sustainability performance and wanting change within their organization. In addition, by elevating it to the board level, it sends out a message that the company no longer wants sustainability to be viewed as a ‘business silo’ within the organization but instead wants it to impact the significant budgetary areas of the business.
CSOs must become trend hunters. Being trend hunters implies staying ahead of the game by observing and studying the trends in sustainability and the wider business environment and applying them to better forecast changes. Hence, it’s all about looking ahead, reading the signs, and using the prevailing winds to chart the course the organization needs to explore. It will also allow businesses to plan, change with the times, and experiment with new solutions. That means CSOs must focus on the big picture, ensuring they understand the industry they are in and its factors. And significantly, keeping an eye on the market, the regulatory framework in the sector, changes in the geo-political environment, and innovations on the horizon.
Conclusion
Combining digital savviness and the readiness to experiment in rapid environments will equip CSOs to lead and be future-oriented. In addition, the teams managed by the CSO will grow as they are adept at mitigating their organization’s economic, social and environmental impacts. One important anticipation is to see a correlation between the early appointment of a CSO, sector leadership, and business returns in the future for organizations.
As Chief Sustainability Officers, they need to be conscious that their decisions impact society and how best to foster sustainability and profitability. This may be the most striking insight into the broad skill set and qualities of the CSO and the parallels with the skill set and qualities of the CEO. And with bated breath, we shall look at the time when a business appoints its CSO as the new CEO. And this may be the next defining moment in the progression of sustainability up the corporate agenda.
References
http://assets.acre.com/white_papers/The_Emergence_of_the_CSO.pdf
GreenBiz (2013). State of the Profession. GreenBiz Group. www.GreenBiz.com
https://leadersin.com/the-ever-evolving-role-of-the-chief-sustainability-officer/
About the Writers:
Romein is a (self-confessed) Pan-Africanist by heart. Romein is a multi-disciplinary professional with experience in various sectors. Contact him via ([email protected])
Ebenezer has specialties in Development communication, Innovative finance & investment, Sustainability and Creative writing. He`s Country Director @ PIRON Global Development GmbH, (www.piron.global) and Branch Manager @ People Investor AG (www.people-investor.com)
Contact him via ([email protected]) & [email protected])
