The urgency of the climate crisis is being felt by businesses who are coming under pressure to weave sustainability into their business goals. This has contributed to the increased demand for chief sustainability officers (CSO), with more hired in 2021 alone than in the previous five years combined, according to a PwC report.
Despite an increase in CSO appointments, it is not yet a mainstream hire. More than half (57%) of Fortune Global 500 companies do not have one. This is due, in part, to a lack of clarity and consistency about what the role entails and an underlying belief that there should be collective ownership of ESG throughout the C-suite. As a relatively new position, finding people with the right level of skill, seniority and experience to enforce genuine change is also a challenge.
But others would argue, when given sufficient resources and authority, a CSO can accelerate an organisation’s sustainability progress. Research shows that companies with a sustainability chief will reach their net zero targets, on average, three years sooner than those that don’t.
As the world of sustainability grows more complex, with an ever-expanding list of regulations and reporting requirements to comply with, is it time for businesses to hire a CSO?
Sustainability must be everybody’s responsibility
It’s not essential for a business to have a designated CSO. This perspective may seem unusual given the growing importance of sustainability and circularity. The UK is targeting net zero by 2050, with a recent poll by Climate Barometer showing strong public support for this. Nearly three quarters of the UK public are backing climate policy, which has risen since the general election and change in government.
There’s growing expectations for organisations to have genuinely green credentials and it’s critical for businesses to support the mutuality of sustainable performance and financial success. It’s for this reason, however, that a sustainability chief is not necessary. The responsibility and accountability for improving ESG belongs to every member of the C-suite and is not the sole duty of one individual.
The enormity and fast-changing nature of sustainability can make it an overwhelming responsibility for one C-suite leader
Sustainability touches on many different business functions and requires specialist knowledge, experience and application in each of the relevant areas. For example, marketing may have to be familiar with the principles of the Green Claims Code, ensuring branding and messaging avoids greenwashing. Technology and IT needs to be aware of the energy-efficiency of devices to help reduce carbon footprints, while compliance must remain up to date with changing sustainability policies and legislation. As such, leaders across the C-suite are responsible for inspiring, influencing and shaping sustainable best-practice across their function.
The enormity and fast-changing nature of sustainability can make it an overwhelming responsibility for one C-suite leader. Add to this the far-reaching complexities and possibilities of corporate and social governance, which tend to fall within the chief sustainability officer’s remit, and the role risks being counterproductive. There’s too much for one individual to effectively stay across, meaning ESG progress doesn’t keep pace with a company’s wider strategy and goals.
ESG should run through an organisation like a stick of rock, with opportunities and risks owned and addressed by each different department. This ensures environment, social and governance are embedded into an organisation’s strategy and day-to-day practices. Achieving this starts with collective ownership of ESG throughout the C-suite.
The benefits of a CSO go far beyond climate goals
Sustainability is too central an issue to be split across the roles of five or six different leaders. To make real progress, sustainability needs a voice unclouded by other priorities, and it needs a seat at the top table. It doesn’t mean that the rest of your leadership team can forget about it, but it will give them someone to whom they’re accountable.
In Encirc’s sector, manufacturing, the transition to renewable energy and net-zero operations poses specific challenges, none of which we could overcome without our CSO. Their specific role has been a driver of industry-first projects, including tapping into industrial hydrogen and building knowledge and information sharing networks with our partners.
A hollow hire for the sake of appearances will leave organisations feeling frustrated
There are, of course, risks involved – if you hire a sustainability chief, you need to be willing to give them the power to make change. A hollow hire for the sake of appearances will leave organisations feeling frustrated and damage your reputation as a business that is serious about its climate commitments.
It’s also important to clearly define their role and what’s expected of the CSO – does your business have clear sustainability goals, or will it be up to your sustainability officer to create them? The latter is a huge undertaking that shouldn’t be shouldered by a single new team member.
But it is worth taking the time to bring sustainability officers into the organisation, because their work will make your business stronger in ways you might not expect. When the international energy crisis hit, Encirc was partly shielded from rising gas prices by one of our sustainability initiatives, in which we installed a wind turbine to provide renewable energy at our Bristol bottling site.
You shouldn’t hire a CSO if you’re looking for a quick fix or a PR win. You should hire one if your business is committed to changing for the better, and you’re willing to give a CSO the power to deliver change. Get it right, and you’ll see benefits that go far beyond carbon emissions.
