Does your corporation intend to be in business in another 100 years? Adding a Chief Sustainability Officer (CSO) to your C-Suite may make the difference. But do enough CEOs understand the sustainability role and why it matters? It's not clear.
A new report from The Weinreb Group, CSO Backstory II: The Evolution of the Chief Sustainability Officer, should serve as a wake-up call on that front. Though there has been progress, with 36 CSOs today, up from 29 in 2011, the importance of the role - which, to be clear, can either be in the C-Suite or report to it, depending on the corporation - begs for a faster pace of corporate adoption. As the author of the report, Ellen Weinreb, puts it: "Sustainability executives understand how to translate external factors into internal business opportunities, and everyone in the C-Suite should be on to this."
The report discusses the changes the role has undergone in just those three years, including shifts in collective benefit, innovation, stakeholder signaling, access and what is termed, "team sport." (See the report's executive summary for more detail). Within those areas, I see a few universal themes emerge in what and how CSOs now serve in their critical capacity.
Integrating External Factors
The fast pace of technology, growing complexity of corporate missions and the increasingly global connections and communication needs all point to a much different business landscape. Corporations need at least one leader with a wide as well as deep professional background, who is practiced (and comfortable) looking outside and inside the company for insights and information that will guide crucial long-term decisions. The CSO is charged with just this.
With so much changing so quickly, CSOs have to consider the role of the company within overall society and to work "at the intersection of business value and employee, customer, and community value," as the Weinreb Report points out. To do this, the people serving in these roles need to have developed a holistic view to give the company fresh perspective on long-term opportunities for collaboration and innovation. And, perhaps in ways no other one executive could. For instance, because of their broader awareness, they might see innovation opportunities in natural resource constraints and collaboration potential where others see competitors. Or, they might identify new ways to engage with communities that significantly improve talent recruitment efforts.
For CSOs, external factors aren't to be avoided, but to be acknowledged and integrated as a matter of course.
From Tactics to Embedded Strategy
True corporate sustainability integration goes much beyond a tactical or risk management approach. Yet, with only 36 corporations taking the topic seriously enough to have named someone to the role, many corporations are still missing the strategic opportunities of embedding it cross-channel and cross stakeholder group. This aligns with findings of the May 2014 GlobeScan/SustainAbility "Sustainability Leaders Report" on the perception of corporate sustainability leadership, where "leaders" in that case were the corporate entity. As Eric Whan, Director of Sustainability at GlobeScan, noted in the related press release:
"Comparing the current crop of recognized leaders with those from a decade ago, we see that we have moved from an era of 'do no harm' leadership where risk management was the dominant framework to one where early stages of transformation are emerging."
And, the brands and individual leaders doing the boldest work now are indeed "transformatively" embedding sustainability. An increasing sophistication in communications skills has likely sped that process. "Stakeholder signaling" and "access," are two examples of that, as called out in the Weinreb Group report: "CSOs are actively engaged in signaling the company's commitment to sustainability across multiple channels," and to multiple stakeholders. As well, elevating the sustainability responsibilities to the C-Suite means the person in the role has the broadest of access possible, with an ability to move "seamlessly from collaborating with employees across the business to influencing the company's core vision and strategy."
Being able to identify value, and bridge meaning and process to all who are involved is how sustainability gets embedded, and how change moves past tactics and into company DNA.
Wisdom Of Experience
Related to this ability to integrate the external, fully embed and communicate sustainability, what can we learn from the fact that the CSO role tends to be the last job before retirement? Like others in the C-Suite, this is a job for a seasoned professional. But unique to the sustainability officer, perhaps, is the need to have both the deep institutional and industry knowledge as well as the motivation (and energy) to build value in whole new directions. As the Weinreb report notes, the CSO is a "strategic lynchpin," charged with driving "broader, more inclusive benefit creation."
While others in the C-Suite may benefit most from their deep experience in operations, financial or marketing functions, for example, Chief Sustainability Officers have to stretch thinking and mold change around issues that often emerge from the less-studied intersections of internal business and external world. There may be no predictable path for arriving at their position, but CSOs have trained themselves over the course of their careers to see opportunity in unusual places and take risks along the way. It may be that the sort of wisdom necessary to do this job only comes from years of experience honing emotional intelligence and communications skills that go beyond any other business expertise development. It may also be the ultimate career pursuit, i.e. once you've changed the course of a business or industry toward sustainable development, what could possibly follow?
Prioritize the CSO or Risk Irrelevance
All that being said, many a corporation has been doing just fine without a Chief Sustainability Officer thus far, so why bother with it now? The cliché bears repeating: Business has changed. Anyone claiming CSOs are just for "progressive" companies has not noticed the surprising mix of traditional industries and corporations that already have one, which (as per the Weinreb Group report) include UPS, Praxair, Verizon, Owens Corning, The Carlyle Group and MGM. What do they know that others don't yet?
Praxair's CSO, Riva Krut, shed some light on that in the course of an email interview:
"At Praxair we have shown that sustainable development can develop programs that deliver bottom line productivity savings and top-line growth. Our new initiatives are to connect our brand, [with the tagline of] Making our planet more productive, with total employee engagement, so that the whole organizational culture drives sustainable development. This is what will not just make us competitive, but will keep us so."
After conducting all the research behind both Part I and Part II of her CSO report, Ellen Weinreb stresses: "the big questions for corporations today should be 'what do we want to be, and where do we want to be, so that we exist in another hundred years?'" That seems like expertise to heed.
Chief Sustainability Officers are the ones who will be thinking about mitigating against extreme weather, developing emergency action plans and tackling other complex issues in the in-between spaces of twenty-first century business. What corporation would risk proceeding without that sort of guidance, given the natural and financial disasters of just the past few years? If translating external factors into internal business opportunities sounds important to you, it's time to put a Chief Sustainability Officer in your C-Suite.
Image courtesy of The Weinreb Group.