Should you employ a Chief Sustainability Officer?
As part of finnCap’s Sustainability & Esg Month here at Business Leader, we have looked into whether modern businesses should look to employ a Chief Sustainability Officer (CSO) or Head of Sustainability in order to help them make the shift to a ‘greener future’.
In order to do this, Business Leader hosted a roundtable discussion to find out the importance of the role.
What is a Chief Sustainability Officer?
In the hierarchy of a business, the senior leadership often consists of a Chief Executive Officer (CEO)/Managing Director, Chair, President, Vice President and board members – as well as other senior roles such as Chief Financial Officer (CFO), Chief Operating Officer (COO) and Non-Executive Director.
The latest edition to the senior leadership team over the last decade has been the introduction of the Chief Sustainability Officer – or CSO.
Although it is known by other corporate titles throughout the business world, the role is essentially the most senior position within a company that is in charge of creating, monitoring, and executing the ESG strategy (environment, social, and governance) – and addresses the challenges and opportunities presented by the world’s shift to addressing sustainability issues.
A sustainability-focused role is not a new concept and has been part of the business world for decades, but in recent times the role has become part of C-suite level management.
With the increase in focus from people, businesses and governments across the globe – the role continues to become increasingly important for modern companies.
A CSO’s primary focus is to analyse and implement a company’s sustainability outlook and environmental impact – and then demonstrate to the board the changes that need to be made. The sustainability officer sets policies that the business needs to stick to ensure a sustainable, yet profitable future.
Audrey Choi, Chief Sustainability Officer at Morgan Stanley (AC)
Daniel Gutiérrez Patiño, CEO of Save The Amazon (DGP)
Maria Adebowale-Schwarte, CEO, Foundation for Future London (MAS)
James Raynor, Chief Executive of Grosvenor Britain & Ireland (JR)
Ben Coombes, Head of Sustainability at Swan Housing (BC)
Should all businesses employ a Chief Sustainability Officer?
MAS: “All businesses small and large should consider employing a Chief Sustainability Officer (CSO) if they want to ensure that your Environment, Sustainability and Governance (ESG) goals are truly at the heart of your organisations. A CSO will play an important part in your business strategy and operations, helping to manage sustainability risks and opportunities.
“How employing such a role for your particular organisation will vary – whether that’s creating a new CSO role, creating one similar or making it part of existing staff’s role and responsibilities. For smaller businesses, such as charities like our own or sole traders, we understand that adding on an extra role will be a challenge and where it’s not possible, it’s worth considering making sure that ESGs and a green action plan are built into business plans to help ensure your company is taking practical steps towards sustainability and measuring impact on the environment.”
JR: “When I became CEO, my first appointment was to create a post for sustainability and innovation on our executive team. With this challenge and expertise at every business debate, sustainability has become a central part of every decision we’ve made since. Responsibility for delivering our green goals however doesn’t just sit within our sustainability and innovation team. We’ve taken a whole company approach.
“Our commitment to climate action is a responsibility shared across the entire business. Every division and individual has annual sustainability goals and is rewarded on our progress to zero carbon, zero waste and enhancing biodiversity. This change is a direct result of this leadership. And it works – staff recently reported that 97% feel we have a genuine commitment to sustainability and 81% feel empowered to deliver our goals. With our green goals represented at every level of our business our approach, ambition and capabilities are unrecognisable from 18 months ago.”
AC: “Whether or not the exact title is Chief Sustainability Officer, it is essential to have a senior leader on the team who is laser focused on driving sustainability as a key component of the business. We are at a moment where increasingly, across industries, corporate leadership, as well as all other stakeholders, now recognise just how critical sustainability is across business functions. As we make the transition to a low carbon future and collectively work to accelerate change, it is imperative to have a dedicated person focused on sustainability and driving partnerships across businesses and functions.”
DGP: “Definitely, but it depends on the size of the business and the business model. Sometimes the CEO is the CSO because the mission of the company is directly related to the social and environmental impact. There are certain companies that can’t afford to have an employee who is solely focused on developing projects and making the company more sustainable. If there are clear instructions from the managerial team in terms of how every área of the company has to be involved in sustainability issues the CSO isn’t imperative and the direction, HR or marketing team could cover the projects that are transversal to the areas.
“Obviously if the company is big enough my recommendation definitely is to have a CSO because it is always better to have people whose most important goal is sustainability to make sure things get done, ensuring a sustainable vision of the company and being the reference point when it comes to sustainability to other stakeholders.”
BC: “I joined the Swan Housing team in May of this year taking on a newly created role as Head of Sustainability. I work alongside teams in every part of the business to deliver Swan’s corporate ‘Love the Planet’ commitments, ensuring that all Swan’s activities are driven towards being more sustainable. As an innovative Housing Association with thousands of existing homes, a significant development pipeline, a modular housing factory and our own in-house developer, we have the capabilities to work with our strategic and borough partners to put in place transformative environmental measures and ensure that these benefit our residents and the wider communities in which we operate.
“The challenges facing our planet cannot be underestimated and the creation of roles such as mine show that businesses like Swan are committed to taking ambitious action to play our part. The role not only provides leadership on this agenda within Swan but, importantly, also demonstrates our commitment to our stakeholders, partners, funders and residents.
“More and more companies are creating sustainability roles at higher tiers of their business, so as to increase the focus on driving their journeys forward. These are critical roles that are needed for businesses to not only comply with growing regulation, but to be innovative and get ahead. Personally, I am passionate about sustainability and am already thoroughly enjoying working with Swan and its stakeholders to do the right thing by the planet and our residents, now and into the future.”
Is sustainability a key part of a modern CEO’s job role?
AC: “The answer is a simple – yes. Increasingly, CEOs, Boards of Directors, shareholders, and regulators are recognising the importance of sustainability not only to a company’s reputation and brand, but also to its risk management, revenue generation, strategy formulation, and talent retention. It has never been clearer that every member of the C-suite must have a window on sustainability and the ability to control a lever of change. Of course, that requires the leadership of a CEO who is proactive in understanding and embracing these broader stakeholder issues — as the most successful companies will be best positioned for the future because their CEO has embraced sustainability and is helping drive it as a key business factor.”
DGP: “Definitely. And every day more. Obviously, the extent of importance that sustainability has to each CEO depends on infinite variables, but every day more customers, governments, and employees are asking for sustainability to be core in the strategy of a company, which is the main role of the modern CEO. I would even dare to say that every day more sustainability will not only be a key part of the CEO’s role but the main driver that structures his goals and vision. Globalisation and the climate crisis is forcing governments from all over the world to structure their policies and decisions mostly in terms of how they plan to contribute to different sustainability issues that are measured through SDGs. It is only natural that this will also be the day-to-day of CEOs and companies in general.”
MAS: “Sustainability is definitely a key part of every CEO’s job role. CEOs and businesses who are not switched on to the crucial importance of Environment, Sustainability and Governance (ESG) goals do so at their own risk as well as the planets. ESG goals are about the environment, people, and your community. Ignoring your business’s relationship to these goals carries a huge reputational risk, as more stakeholders, funders and other key bodies are looking at how businesses take responsibility for their actions. We have found that all of our East Bank partners are working to ESG goals, and here at the Foundation for Future London, we are ensuring that we have an action plan in place with achievable but ambitious KPIs to meet.”