The Chief Sustainability Officer's 7 Critical Success Factors
According to a Recruiters.com staffing report, demand for Chief Sustainability Officers is expected to grow exponentially. The report forecasts 56,740 new jobs to be filled by 2029.
But according to Eco-Business, "A troubling number of chief sustainability officers (CSOs) are finding that the job has become unsustainable." Turnover nearly matches the hire rate.
That's in part because many companies are hiring this role for the first time. They lack experience to know how the role should be structured for success.
How a Chief Sustainability Officer Can Survive and Thrive
Recognizing the need for a CSO is the easy part. Positioning the role for success is more difficult.
Sustainability is complex and pervasive. It integrates with every part of the business. So, if the company chooses to integrate commercial and climate interests, you need a leader to drive enterprise-wide actions that deliver both outcomes.
For that, we recommend a 7-point position description. It identifies the overarching role-based dimensions needed to succeed.
01. Climate Champion
This part of the role recognizes that support is needed from several constituencies to achieve meaningful results. The CSO must first build internal relationships to transform from within. This requires educating, informing and even evangelizing the merits, and consequences for inaction, with all company stakeholders.
Support is bolstered when it's financially rewarding.
Therefore, the CSO will need to balance the company's climate agenda with its financial goals. That means showing how decarbonization levers impact revenues and profits.
It means showing how decarbonization strategies create energy savings and lower operating costs. It means showing how environmentally produced products earn a price premium with a measurable target audience of purpose driven buyers. It also means demonstrating a clear and compelling sustainability ROI.
02. Technology Sponsor
Technology is needed to efficiently drive a corporate climate program.
For many companies, the technology adoption will dovetail with their digital transformation.
Based on our experience in working with clients, we have created a decarbonization toolkit that brings prioritization, sequence and measurability to GHG emission reduction programs. Here's how it works if you want to build your own.
It starts with a management information system such as Salesforce Net Zero Cloud. This type of application is needed to capture, categorize and report the company's GHG emissions. That carbon footprint must be parameterized to show and compare emissions by office, geography, asset and other factors.
We then apply What-If analysis models to find the least time and cost route to the maximum GHG reductions.
With this information we can advance from GHG reporting to decarbonization methods. These methods include things like energy reduction and electrification.
Finally, we apply application workflows for process automation and dashboards for performance measurement. We use AI to deliver recommendations that will improve progress and outcomes during the journey. The end result is an automation system that creates efficiency, optimization and insights.
03. Decarbonization Leader
This part of the role leads decarbonization programs. Things like cost and energy savings in utilities, water, and waste. It often starts by finding your biggest spenders, expenses and operational anomalies across locations.
You can't go it alone. But you can identify the least cost and highest impact carbon reduction programs, organize the team's, and project manage their implementation.
You will need to create the planning, coordinate resources across departments, measure progress, and track results in both financial and GHG impact terms. This also requires governance. So, reflect back to success factor number 1 and get some senior stakeholders for your steering committee.
04. Finance Liaison
This part of the role partners with finance executives to collaborate on the carbon reduction levers and their impact to cost and revenue.
You want to show the financial effect of climate strategies on things like energy cost and supply chain savings. You want to show realistic projections of how more environmentally friendly products can drive the next wave of growth through new target audiences and price premiums.
With the above information you are prepared to create a budget that calculates the necessary funding.
And finally, you can work with your accounting department to assess the plethora of tax credits, rebates, incentives and exemptions available for green investments. Our experience has been that taking advantage of government subsidies and clean energy credits can fund anywhere from 10 to 60% of your budget.
05. Change Agent
Now your role includes change agent. That's because even when you know what to do transformation is elusive.
For many companies, embracing change is not the norm and can be a difficult journey. So, you need to apply a change management program. This is a structured way to systemically shift the organization from a current state to a defined future state. And do it with minimum business interruption.
At Johnny Grow, we use a change management methodology we call TEAMS. A depiction of the process is shown below.
An essential best practice is to create a communication plan that delivers staged messaging along a four-step continuum from Awareness, to Interest, to Understanding, to Engagement.
It's also helpful to brand your program. This is a powerful method to demonstrate the importance, generate interest and create a vehicle for staff to proudly associate. It can also be used to integrate climate goals into the company's brand and culture.
Be clear that management and staff endorsement are needed for long-term success. We can only move the mountain if we all push it from the same side.
06. Regulatory Guardian
Regulatory compliance is a non-negotiable part of the role.
But that's challenged as compliance, rules and regulations are fluid and not always clear.
In the U.S., regulatory authorities such as the state of California and the SEC have started, stopped, restarted and altered their compliance dictates multiple times.
The UK and EU have done the same. But their shifts require more analysis as their requirements are much more complex. Adherence to things like the double materiality assessment, introduction of scope 3 reporting, and ESRS guidance continue to evolve.
And none of this can be minimized as climate compliance reporting must stand up to the scrutiny of independent third-party reviews.
For most companies, the CSO should take the lead and collaborate with legal or risk analysis staff as needed.
07. Provider of Insights
Finally, the role must convert data into information and insights.
The CSO must link company data and market trends to find and exploit carbon reduction and company growth opportunities.
He or she must show how to use data for data-driven decisions that lower GHGs and create company value. This type of reporting often leads to innovation of new products, services, and operational processes.
The best reporting assembles data into dynamic models that forecast future GHG reductions and company growth.
Lastly, recognize that reporting is more than numbers and statistics. You are telling the company's story. How the company assumes a role of global steward, responsible citizen and contributor to a carbon free world. It's this part of the reporting that creates the most trust with stakeholders.
Two Final Considerations
Two more points.
First, not all parts of the role can be done at the same time. Each company will have different goals, priorities, maturity and budget. These factors will impact your sequence, schedule and plan.
Second, small and midsize companies may not start out with or need a full-time CSO. For companies like these, Johnny Grow offers a fractional CSO service.
The Point is This
The 7-point Chief Sustainability Officer position description depicts balance among the most important measures of success.
It ensures coverage of essential duties and verifies that no critical responsibility is unfulfilled.
It can be used as a periodic measurement tool. When each part of the role is measured and plotted on the radar graph it quickly visualizes position, progress and possible gaps. It encourages productive conversations about focus and time allocation. And it improves the likelihood that the role is maximizing its contribution to the company and the planet.