Half of Chief Sustainability Officers have only been in their current position for one year, and fewer than a third come from a sustainability background, yet their role is fast evolving to become an integral part of the C-suite.
A new report from Imperial’s Leonardo Centre on Business for Society and education provider Emeritus shows that the Chief Sustainability Officer is growing in importance, with half reporting directly to their CEO or executive board.
The research is based on interviews with 37 sustainability executives, mostly in large multinational companies, as well as analysis of 900,000 corporate sustainability initiatives in the GOLDEN Sustainability Database.
Where they are one degree removed from the CEO, CSO reporting lines diverge markedly – they survey found that they report to heads of finance, strategy, innovation, HR, brand management, or marketing. “Interestingly in the few cases where CSOs were three steps away from the CEO, they reported to communications or marketing. With one exception, these companies’ sustainability strategies were not very advanced,” the authors noted.
The report also shows that despite their growing responsibility, the majority of Chief Sustainability Officers are relatively new to their roles and to the world of sustainability: two-thirds of them come from a business or engineering background, while only 30% studied sustainability prior to their appointment.
This may explain why Emeritus sustainability courses are its second-fastest growing in terms of attendance (after AI courses), with "tens of thousands of people taking them," according to Anand Chopra-McGowan, General Manager, Enterprise Business UK and Europe.
The wide majority (90%) of the companies surveyed have a sustainability department in place, with an average of 17 full-time employees. They also tend to have incentive systems in place to encourage executives to meet sustainability KPIs, though most of them “are only connected to climate change”. (Of course, fostering sustainability within a company is not all about financial incentives.)
Chief Sustainability Officer challenges
The top challenge highlighted by most was around moving beyond compliance and an increasingly complex set of regulations and standards, to focus on strategy and transformational change processes meant to drive sustainable growth.
Chopra-McGowan talked to CSO Futures about how sustainability managers perceive this reporting burden: "We organised a dinner with about a dozen or so of these CSOs, two weeks ago in London, and we sort of went around the table to really understand what some of the sort of challenges and opportunities are. And I think it's important to state that CSOs were very supportive of the need for regulation and assessments and reporting, but were completely overwhelmed by how much time it takes to do it. And we've heard multiple stories about how it is, in many cases, redundant and duplicative."
Stakeholder engagement also remains a headache for most Chief Sustainability Officers: “With at least half a dozen stakeholder groups that often have competing goals, CSOs struggle to bring everyone into the decision-making process,” says the report.
This is an experience shared by most of the Chief Sustainability Officers interviewed by CSO Futures: SAP’s Daniel Schmid says his biggest task is “buy-in”, while BT’s Sarwar Khan makes a point of sitting down with customers every week to involve them in the telco’s sustainable product development.
Prioritising between different sustainability efforts and creating the structure, governance and incentive systems to promote sustainability in all departments were also identified as challenges. According to the report, the latter is set to grow as CSOs’ remit becomes broader and more comprehensive: “These issues arise as the sustainability strategy is expanded beyond the CSO’s immediate span of control and into the broader organisation, where legacy structures and systems might not be adapted to sustainability goals and values,” the authors noted.