Why Chief Sustainability Officers As We Know Them Should Disappear
The COVID-19 crisis has accelerated consumer sustainability awareness, generated a sense of urgency and increased pressure for new governmental regulations. Companies are now pledging in turn to track and improve their sustainability metrics, often implemented by a Chief Sustainability Officer (CSO).
However, there are overlooked opportunities to accelerate and deepen the change while making a profit – and that’s what I will try to show here.
The root cause of the issue – the current job description of a CSO
A CEO is the owner of the strategy and the resource allocation of its company to generate profitable growth, the CSOs on the other hand “are to work with managers, employees, customers, and shareholders to address the organisations approach to environmental responsibility with the goal to minimise the company’s environmental impact”.
Aren’t we missing something?
While future proofing and reducing footprint of a company in anticipation of new regulations is a must, why is a CSO’s job framed in a way that only generates costs for a company and not profit or growth?
A big waste in terms of untapped potential
As you might have guessed from what we discussed above, there are two ways to see the sustainability topic:
1. Sustainability as a compliance and reporting tool: You can focus on an organisation's own footprint to comply to current and future regulations, where this will serve as licenses to operate and get financed. This new world is already happening with 33% of investment looking as ESG metric among others.
2. Sustainability for business innovation and performance: Leveraging sustainability by tuning it to the functional, social and emotional needs of your business ecosystem. Using it to derive new products and services with reduced footprint, increase your margins by reducing your own costs, or as a tool to help others reduce their footprint and achieving their own sustainability objectives.
So how can a CSO step in and lead a company to move from focusing exclusively on the first view to integrating both?
A. Aligning business and sustainability - brainstorming
Sustainability should be a supporting strategy. This means that you can use it strategically to become a better business today and in the future. We will show how by moving from performance alone to performance with impact, companies can build new competitive advantages in their industry.
The very first stage is to map all the UN Sustainable Development Goals (SDG) and see which your company aligns best with:
Rework the needs of your key stakeholders with a sustainability lens:
- What SDGs are shared with customer expectations?
- How does it answer all or part of their functional/emotional/status needs?
- How does it align with their concerns and associated purchasing behaviours?
The organisation, cost structure and processes of the company:
- How can an SDG affect the cost structure of the company or of its products?
- How can this reduce the time spent on specific tasks?
- How can this affect COGS and/or utility usage?
The capabilities, skills and know-how of the company:
- Which objectives are most aligned with the daily tasks of your teams involved?
- Are your teams’ skills aligned with the need for one or several objectives?
- Are your team members familiar with the technologies or business models involved?
The flexibility of the ecosystem of suppliers and value chain players:
- Can you leverage your value chain players to achieve an objective or learn new skills?
- Can you create new partnerships and enter new markets aligned with SDGs?
- How can the decisions above benefit your cost structure?
Those few questions can help your teams brainstorm and identify which SDGs to pursue.
There are just as many options as one is willing to look at. The challenge is rather to pick the ones that are the most impactful both for business and sustainability.
B. Prioritise, build a vision and execute
The next step is to determine which ones should be prioritised. You should see projects that contribute to both business and society overall.
Prioritisation of such projects should follow a typical business canvas with the usual indicators: NPV or ROI but with one additional metric: Impact.
How do you measure impact?
The idea is to assess the net impact of the initiative with its value measured in currency given back to the community, climate, or biodiversity.
Whether it is dollar value irrigating unfavoured communities, net carbon reduction (and its current and future dollar value), water savings, etc. All of those can serve the very own company agenda and prepare it for its own sustainability goals too.
Once the projects are prioritised, it is important to craft a vision that resonates with the company’s core DNA, your customers, your investors and other stakeholders.
This vision, that should reach both hearts and minds, will serve as a guiding light to support accurate delegated decisions in the organisation so that the effort can be sustained.
C. Infuse a new culture and nurture
This step is critical to ensure the leadership, employees and stakeholders understand the importance of the topic and assess how they can contribute at their own level.
Several things can be made to ensure this is covered end-to-end:
- Communication across the board
- Target setting and incentives aligned with new intents
- Delegate of authority on new initiatives to foster adoption & innovation
- Expertise building and nurturing, at corporate and local levels
- Updated Governance to track progress and infuse new culture
All those are here to foster bottom-up initiatives and make stakeholders feel capable and incentivised to bring their own ideas forward and execute them as long as they fit requirements.
Your role remains to tweak the signals, KPIs, incentives to ensure the psychological safety to give ideas, and the ownership to execute them are well established. As the organisation reaches its first goals, those would be incrementally updated but would also be extended to new categories.
Being many doing a bit goes a long way.
We can get there.
If every business takes on incremental steps on sustainability with existing technologies we can help decrease emissions by 30% to 40%, which is all we need to keep up to the 1.5C trajectory until 2027.
If doing good while doing the business we love is possible, why not simply do it?