Corporate sustainability succeeds with the right leadership talent. Either an executive leader takes on the responsibility alongside their existing role, or a dedicated Chief Sustainability Officer (CSO) is hired or appointed internally.
The choice of sustainability leader is determined by the business’ sustainability maturity level and industry. For those who appoint a Chief Sustainability Officer, it is important to note this is just one step in building a more sustainable business. For a CSO to thrive, sustainability needs to be part of the corporate DNA. This means embedding it across the management team, linking sustainability with the executive bonus structure, and securing CEO and board sponsorship.
Yan Vermeulen, Head of the Global Chemical & Process Industries and Southeast Asia Industrial practices, looks at the difference between a permanent and interim CSO, and how to get the most out of them once they’ve been appointed.
Is a Chief Sustainability Officer a short-term position or permanent hire?
Organizations can appoint a CSO as either a permanent posting or as a shorter-term role, typically set to a two-year timeframe. The effectiveness of either decision is dependent on industry, geography, and desired outcome.
For organizations early in their sustainability journey, whose impact on the environment may be less obvious, or who operate in a country that isn’t as advanced in developing sustainability goals, it may be worth appointing a CSO for a fixed period. They can assess the company’s level and appetite for sustainability, provide consultation, be less political when making recommendations, and scope out the role for a permanent position. Geography also plays a part. In some countries the availability of senior-level sustainability talent is scarce and fishing in interim talent pools may therefore be the answer.
Appointing a permanent CSO might be right for organizations who understand their sustainability needs and whose environmental impact is more apparent. Rather than simply consulting or implementing a single program, a permanent CSO means the organization wants to institutionalize sustainability and come to a stage where they’re living and breathing their sustainability commitments. It also sends a clear message to stakeholders: ‘we view sustainability as a long-term goal we intend to work at.’ Read more on the evolving role of sustainability leaders.
What’s the key to unlocking corporate sustainability?
Corporate sustainability was commonly overseen by a single position, often in a more advisory capacity. A single role, typically someone who demonstrated a passion for sustainability, and who was responsible for implementing policies through a top-down approach.
Now, companies understand sustainability needs to be managed by a group of peers, often the senior management team who can drive sustainability throughout their functions, with the direction of a CSO.
By doing so, sustainability is embedded in everything the organization does – from how it procures goods to how it makes and sells products and services. Sustainability is incorporated into the ‘decision dashboard’, becoming part of executives’ mindsets. It makes sustainability everyone’s responsibility and means there are fewer hurdles on the road to building a more sustainable business.
At the same time,
CSOs who report directly into their CEOs achieve more within a shorter timeframe. There’s less resistance to new initiatives and sustainability directives are taken more seriously if other executives know they have the CEO’s backing.
Much of this comes down to the relationship with fellow C-suite members who will view the CSO as a peer if they also report into the CEO.
If these approaches are the stick, then linking sustainability to executive bonuses is definitely the carrot. This method is among the most effective in driving sustainability. Individuals across the management team make sustainability their personal responsibility and the CSO finds less resistance to their mission if executives are highly incentivized to carry it out. It also demonstrates to stakeholders how important the organization considers sustainability.
Can business leaders afford to put a foot wrong when it comes to climate pledges for their organizations? Read: the opportunity cost most leaders are missing.
How can I embed sustainability across my organization’s C-suite?
Linking executive bonuses to sustainability goals goes a long way in driving change. Appointing function leaders who also demonstrate a passion for sustainability and who have expertise in the area leads to a purpose-led environment and a sustainability strategy driven by a group with shared values and beliefs.
The challenge is in appointing these leaders. Organizations typically replace one C-suite member at one time. Rarely is a full or even partial leadership cohort replaced in its entirety. Embedding sustainability within the C-suite through external hires may therefore be a slow process. Furthermore, organizations run the risk of appointing someone who then operates in a silo with other members of the management team abdicating responsibility.
Overcoming this requires effective sustainability succession planning to build a strong cohort of talent which can move up through the organization.
Often, this means identifying internal leaders or hiring external senior talent who are sustainability-oriented with a mind for them to eventually step up.
At Odgers Berndtson our network of sustainability-conscious leaders is broad, spanning all industries and geographies. We also provide leadership profiling to assess leaders’ capabilities in a plethora of domains, including sustainability. Working across 32 countries means we can help organizations of any size across the world with their long-term sustainability goals.
To read more on our collected insights and opinions on the subject of Sustainability in the workplace and beyond, read our Sustainability Matters here.
Stay up to date: Sign up here for our global newsletter OBSERVE, and receive the latest news in leadership and top talent, industry insights, and events directly to your inbox.