Why the sudden scramble to add sustainability to the C-Suite?

Twenty years ago the idea of having a senior executive with full-time responsibility for sustainability wasn't on most companies' radar. A little over a decade later, however, this had begun to change. By 2014, 90 of the S&P 500 had a chief sustainability officer sitting at the top table and the pace at which organisations are now recruiting for the role is accelerating according to The Rise of the Chief Sustainability Officer, a new Korn Ferry report based on interviews with 50 CEOs and sustainability officers worldwide.

So, why the sudden scramble to add the chief sustainability officer to the C-Suite? "Sustainability leadership is entering a new phase and 2020 and the pandemic will be seen as the tipping point for when sustainability became a business imperative," the report's author, Andrew Lowe, a partner in the global corporate affairs practice at Korn Ferry in London, told The Irish Times.

“The pressure for change or the opportunity for growth, depending on how you look at it, is multi-dimensional. There is investor pressure, shareholder pressure and a huge amount of reporting and disclosure not just around climate but other metrics, particularly human capital, with a real requirement for D&I [diversity and inclusion] disclosure in a substantive way.”

In the past, where organisations considered sustainability in its own right at all, it was usually folded into another other responsibility such as corporate social responsibility, risk and control, ethics, legal or procurement. What’s changed is that sustainability is now seen as a contributor to, if not a determinant of business success, and this has rocketed the role up the pecking order.

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“Once an organisation crosses the Rubicon as it were, it suddenly becomes a business imperative and you need an individual at the heart of your corporate strategy capable of making sense of what’s happening in the outside world and able to translate what can often be complex scientific and technical issues and relate them to the business.

“But, perhaps most crucially of all, the person needs to be commercial and help the business identify value, which can be anything from reputation and brand to product innovation and market differentiation. From a customer standpoint the increase in interest around sustainability is also huge and it’s driving B2B [business-to-business] and B2C [business-to-consumer] decisions, both at the high and value ends of the spectrum,” Lowe says.

“Sustainability is systemic and we see it sitting between strategy and the CEO’s office,” he adds. “Chief sustainability officers are therefore dependent on building relationships to deliver internal and external change by working across multiple business areas such as risk, finance and R&D.”

As the role is still relatively new, analysis around the skillset required for the job is ongoing. But an ideal candidate profile is emerging and it’s likely to be someone who is already a senior executive with a broad business background and a strong network of external contacts. This makes those with a consultancy background a good fit for the job.

It’s a challenging role as chief sustainability officers are often “misunderstood” within their organisations. They need to be self-contained enough to withstand the fact that the culture is likely to be against them and brave enough to put up a fight if there are sacred cows that need to be challenged. (If the job piques your interest but your CV would need specific sustainability strengthening, there are courses available from bodies such as the Cambridge Institute for Sustainability Leadership.)

“The job requires a mix of risk taking, tolerance, resilience and the ability to get traction at the highest levels. It also requires a willingness to fail fast and often,” Lowe says. “What’s not required is over-confidence, rigidity, thinking small or inauthenticity, as a chief sustainability officer must have the ability to influence at every level.”

As a minimum, Lowe says a chief sustainability officer/sustainability team requires expertise in: non-financial reporting; data; insights and trends analysis; advocacy; environment (climate); and social purpose. Depending on the organisation, there may be other requirements such as a good understanding of supply chain dynamics.

Syngenta is a Swiss-based global provider of agricultural science and technology and its chief sustainability officer Alexandra Brand is quoted in the Korn Ferry report. "I don't make the distinction between the function and the business," Brand says. "Sustainability is part of our core purpose, and so our sustainability teams are the enablers and catalyst."

Bob Casey runs the Irish arm of Korn Ferry and he says interest in the chief sustainability officer role is growing here. "Over the last six months, we are having a lot more conversations around this type of role and have a couple of live mandates," he says.

“What is also interesting is where organisations see this role sitting within their structure and to whom a chief sustainability officer reports. That tells a lot.”

Traditionally, sustainability and profit were not happy bedfellows but Lowe says we have reached a point where there is no longer tension between the two because “ESG [environment, sustainability, governance] goals are now core to business strategy and linked to an organisation’s purpose and values”.

“What was clear from the interviews we conducted was that the tipping point I mentioned earlier was not about altruism or anything purely environmentally focused, it was around a fundamental transformation required by businesses.

“At this point the pressure is to do with the timeframe because it requires investment today to build for the future, but for organisations that ‘do’ the sustainability piece well, the returns are considerable and far-reaching.”