For a business that wants to improve both its environmental impact and resilience, hiring someone to achieve that objective would on the face of it, seem like the most logical decision to make. But attaining corporate sustainability success is often more nuanced than just hiring a chief sustainability officer (CSO). While leadership is at the core of driving a business towards this goal, it’s the right type of leaders, appointed at the right time, which truly matter.
In an ideal world those leaders come from inside the business. They would a be strategic thinker who understands the organisation at an operational level, and who can work with outside experts to ascertain the priorities and the scale of the change required. An internal appointment can also demonstrate to employees that the company rewards those who champion ethical causes and can align commercial success with sustainable business. There are external advisers who can help an internal appointee define the sustainability journey and provide guidance on current or incoming regulation.
That’s not to say hiring a specialist CSO isn’t the right choice. A CSO well-versed in industry-specific sustainability can help identify, communicate and implement a roadmap, and set goals aligned to existing and future legislation. The creation of the CSO role (whether an internal or external appointee) sends a clear message to stakeholders: the organisation takes sustainability seriously enough to dedicate a senior role to achieving the outcome.
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It’s important to remember that the first CSO doesn’t need to be a permanent appointment. A CSO appointed for a fixed term can quickly assess the company’s level and appetite for sustainability, provide advice, be less political when making recommendations, and scope out the role for a permanent position. The position could then be filled by a permanent appointee from inside or outside the organisation, once the priorities are clearer. Geography also plays a part. In some countries the availability of senior level sustainability talent is scarce as this is a new functional capability for many industries. In these situations, bringing in either advisory support or fishing in interim talent pools is the only option.
For other organisations, hiring or internally appointing a CSO may not be enough. Those in industries such as energy, chemical processing, or materials, where the environmental impact is clear, are likely to need more than a single role. In the types of organisations where driving sustainability means addressing challenges across every function and working with suppliers up and down the supply chain, a lone evangelist championing sustainability in a corporate silo won’t be enough to tackle the scale of the problem.
At the same time, with the growth of ESG-led investing, significant risk implications around greenwashing, and an increasingly complex regulatory landscape, competency around sustainability for all leaders has become a necessity. The head of procurement needs a comprehensive knowledge of all relevant ESG legislation to be able to choose the right suppliers. In an altogether different function, like HR, the chief human resources officer needs to understand and influence the organisation’s entire sustainability strategy to attract and retain talent.
In the types of businesses where the sustainability challenge is systemic, a CSO acting alone risks being unable to integrate sustainability goals into all areas of the organisation and coming up against resistance. Aligning business objectives with sustainability means bringing disparate parts of an organisation together and often requires trade-offs in individual functions. When sustainability isn’t ‘owned’ by every leader is when these trade-offs meet conflict and it becomes harder to align functions towards a common sustainability objective. What’s more, simply appointing a single CSO risks other function leaders abdicating responsibility for sustainability and then inevitably nothing gets done.
Avoiding these pitfalls means appointing a suite of sustainability-oriented executives. A group of peers with equal responsibility for sustainability goals, answerable to the CEO, creates an environment where sustainability is embedded at an operational level. It becomes part of the ‘decision dashboard’, incorporated into thinking and mindsets. Adding to this an executive bonus structure linked to sustainability targets and organisations can drive positive change fast.
However, embedding sustainability within the C-suite may be a slow process. This runs the risk of the silo effect, with a newly appointed sustainability-focused leader operating without the support of their less sustainability-focused peers.
Overcoming this requires effective succession planning to build a strong pool of talent which can move up through the organisation. It is a process of mapping sustainability-oriented individuals at a management level with a progression plan in mind. This is the most robust approach to ensuring an organisation has the skills to meet sustainability challenges over the long-term.
The type of sustainability leader an organisation needs depends on its industry, maturity, and the current leadership skills mix. But two things are definite: corporate sustainability is achieved through leadership, and that leadership needs to work together, across functions, and towards a common goal. Such leaders are fit for the future. They are multi-faceted executives who can pivot between the big picture and execution, who proactively prepare for the future while also respecting legacy success and who engage and leverage the power of the whole while also connecting to the individual.
Yan Vermeulen is partner, Singapore office and global practice head, process industries, for headhunting firm Odgers Berndtson. Clare Glackin is head of Odgers Berndtson’s industrial practice for Europe, Middle East and Africa.