Chief Sustainability Officers

But with no rulebook, and a growing list of environmental, social and governance (ESG) concerns for businesses, how can CSOs create lasting change?

“The key word is collaboration. CSOs can lead the industry by sharing not only learnings, but mistakes. When it comes to sustainability and net zero, the only way we’ll ‘win’ is together,” says Emma Suchland, UK Private Business Leader at PwC UK. “For example, with Scope 3 emissions, companies need to work hand in hand with suppliers, firstly to understand the full extent of their emissions, and second to decrease them. This can only happen with increased transparency and by working together.”

The remit of the CSO has seen rapid change. Increasingly, the role demands knowledge of all parts of the business. The interconnectedness of ESG issues requires an ability to join the dots, and to have the confidence to challenge traditional ways of working.

Understanding what matters the most to your business

Given the breadth of the ESG agenda, it can be challenging to know where to start so your investment is meaningful.

“To move forward, you need to understand what is material to your business. Those material issues are going to make the biggest impact”, explained Dave Kowal, Chief of People and Sustainability Officer, The Vita Group, in a recent LinkedIn Live episode. That assessment can not be downplayed. Mapping out the long-term impacts of particular issues can also help get buy-in from the rest of the c-suite and the Board.

For example, a Task Force on Climate-Related Financial Disclosures (TCFD) analysis may reveal the impact of a changing climate on a business’s operational sites. This has the potential to impact the workforce, manufacturing supply chains, energy sources and technology, which will change how we all do business. By highlighting material challenges such as these, CSOs can better understand the interconnected nature of ESG. Changing one thing in isolation will rarely be the solution.

On the journey Baker Hughes has been on to transform their business, Chief Sustainability Officer Allyson Anderson Book, notes: “we learnt very quickly that you have to think about cutting emissions in a holistic sense. You can’t cut emissions unless you operate in a much smarter way.”

Progress, not perfection

Holding businesses back is often the fear of failure: publicly sharing targets and not achieving them. However the very nature of target setting helps direct focus, and ensures good governance is put in place to capture the right data.

“Most businesses realise that there will be an element of ‘learning as you go’ when it comes to policies and strategies around relatively new ESG issues, but that’s not to say it should all be guesswork,” says Suchland. “Putting processes in place to gather quality data should be critical for business leaders that want to understand progress. It’s not all about perfection, either. There’s an understanding that over time, the quality of reporting will increase.”

This is echoed by Lianne Smith, Group IMS and Sustainability Manager at The Senator Group:

Ultimately, it’s not just the CSO that’s responsible; there’s a collective need to get things right. For example, the CFO might hold the pen when it comes to signing-off ESG data for external reporting. CSOs have a central role in helping them understand and assess ESG impacts and value, in a way that’s measurable and stands up to scrutiny.

Transparent reporting, and agreed metrics, can also create a level playing field so consumers, investors and other stakeholder groups can see how companies measure up. Without providing this data, stakeholders will start to fill in the gaps themselves.

The role of communication

Communicating across stakeholder groups is an integral part of the CSO role.

Investors, for example, are increasingly aware of the regulatory shift around ESG issues, and in particular net zero. This has translated into greater scrutiny of investment targets. Around three quarters of UK investors consider a company’s exposure to ESG risks and opportunities when screening investment opportunities. This is where the CSO can help. By demonstrating how risks and opportunities are being addressed, there’s potential to add value and unlock capital.

Then there’s employees. CSOs need to galvanise all corners of their business - not just ESG experts.

“To make our sustainability strategy a success, we pulled together a team that reached every department - logistics, facilities and maintenance, finance, bids - and from that point, we spent the first 12 months of our journey learning as a team. It was about education, gathering data, and understanding our Scope 3 impact.” explains Smith, “We then developed a sustainability steering group, comprising senior management and those able to impact change. They are now jointly responsible for setting targets and driving those forward.”

By embedding sustainability practices into an organisation, it’s far easier to influence change. This division of responsibility, and awareness of ESG objectives, targets and goals, ensures all employees are walking the talk, and your company isn’t likely to fall foul.

The role of the CSO will continue to evolve as organisations understand the extent to which ESG needs to be at the heart of their business strategy. To find out more, watch the latest edition of our CSO LinkedIn Live series, where we caught up with beauty and supplement brand, Absolute Collagen.