08 Oct 2019

The rapid rise of the Chief Sustainability Officer

Is the Chief Sustainability Officer about to become the most crucial member of the C-suite guiding a transition toward a new economic reality?

Corporate sustainability is no longer the domain of generalists, marketing experts or individuals entering the twilight years of their career. Now, it’s striking at the strategic and operational core of some of the most well-regarded global companies.

More and more chief executives and founders, such as Virgin Group’s Richard Branson and Procter & Gamble CEO David Taylor, are proactively championing sustainability.

More than that, an increasing number of top firms are investing in senior C-suite level leaders who can drive the formulation and execution of a corporate sustainability strategy.

Enter the Chief Sustainability Officer (CSO)

Typically, a CSO has a title and seniority on a par with C-level finance, operational, and technical heads and reports directly to the CEO.

But Marie-Claire Daveu, Chief Sustainability Officer at global luxury giant Kering and one of France’s most celebrated champions for sustainable development, goes even further.

She believes that in a world beset with unprecedented environmental and social challenges, the CSO’s deep know-how actual makes him or her the ideal CEO.

“Traditionally, being the CFO or Chief of Strategy was seen as a gateway to being a CEO,” says Daveu, adding “but as more investors see sustainability as a necessary strategy for both survival and differentiation, the CSO is advantageously placed to serve as a company’s CEO and guide its transition toward a new economic reality, where competitiveness and sustainability are inseparable.”

The first known CSO appointments were at DuPont and Nike in 2004.

In just three years, the number of companies appointing a CSO for the very first time has sharply risen. Major players such as Diageo, P&G, Mastercard, Nissan, Ralph Lauren, Tyson Foods and others have all created this new position within their C-suites.

No more ‘greenwashing’, please

The increase in demand for CSOs reflects a significant evolution in corporate sustainability. By and large, this is no longer about ‘greenwashing’, but about being a good corporate citizen. Sustainability is now incorporated into two-thirds of companies’ core missions and signatories of the UN’s Principles for Responsible Investment represent over half of the world’s institutional assets.

“The corporate sustainability function currently plays an important sensing and monitoring role,” explains Jason Jay, a Senior Lecturer at the MIT Sloan School of Management and Director of the Sustainability Initiative at MIT Sloan. According to Jay, CSOs today are constantly listening to scientists, regulators, customers and investors. Plus, they are monitoring the company’s performance on key sustainability indicators and delegating material issues to the relevant business unit.

“The biggest change evident to me in the last five years is the increasing business relevance accorded to sustainability,” says Annemarie Meisling, Head of Sustainability at Danish bioscience corporation Chr. Hansen. Billed as the world’s most sustainable company in the 2019 Corporate Knights Global 100 Index. Chr Hansen produces natural beneficial bacteria. These can enhance ‘naturality’ in a wide range of foods as well as lower the use of chemicals in agriculture and the overuse of antibiotics for both humans and in livestock.

At the World Economic Forum earlier this year, Chr. Hansen was lauded for scoring 100 on the ‘clean revenue’ indicator.

Sustainability driving innovation

Kering, ranked second in the composite Global 100 Index and first within the luxury and fashion sector, is a pioneer in the future of sustainable fashion. Their sustainability mission is driven by Chairman François-Henri Pinault’s ethos that “luxury and sustainability are one and the same”. “It’s not simply an ethical necessity,” says Daveu, their CFO, “although that is important in and of itself, but we see sustainability as a driver of innovation, creativity and value creation.”

In 2013, the group founded the Materials Innovation Lab, which provides all its fashion houses with more than 3,000 sustainable fabric and textile samples. The lab also devotes a major effort to promoting sustainability among suppliers. Daveu stresses its growing importance to Kering in meetings and formal training sessions and highlights the value of certifications.

In the second part of this Insight about the rise of the CSO, we look at roles and responsibilities, how to succeed, and what the future holds for Chief Sustainability Officers.