Chief sustainability officer

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The chief sustainability officer, sometimes known by other titles, is the corporate title of an executive position within a corporation that is in charge of the corporation's "environmental" programs. Several companies have created such environmental manager positions in the 21st century to formalize their commitment to the environment. The rise of the investor ESG (Environment, Social and Governance) movement and stakeholder capitalism, has increased the need for corporations to address sustainability and social issues across their value chain, and address growing needs of external stakeholders. [1] Normally these responsibilities rest with the facility manager, who has provided cost effective resource and environmental control as part of the basic services necessary for the company to function. However, as sustainability initiatives have expanded beyond the facility — so has the importance of the position to what is now a C-level executive role. The position of CSO has not been standardized across industries and individual companies which leads it to take on differing roles depending on the organization.  The position has also been challenged as symbolic, in that it does not actually have the effect of increasing sustainable practices.

Contents

As of 2018, 44 CSOs were identified at largest companies in the world, with most having the rank of vice president or higher, and according to the Weinreb Group 45% of CSOs are women and 55% men as of 2018. A 2011 study [2] found that the majority of top corporate sustainability executives are two degrees removed from their CEO in the corporate hierarchy, meaning that their boss reports to the CEO.

Responsibilities

Chief sustainability officers are responsible for an organization's objectives and initiatives relating to sustainability. [3]   Sustainability is defined by the United Nations as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” [4]

The intent of the CSO position, as a member of the c-suite, is to address sustainability issues across a firm and stress the significance of sustainability to other top executives. [5]   The c-suite is a collection of the highest level executives of a firm, including but not limited to the chief executive officer (CEO), chief marketing officer (CMO), chief financial officer (CFO), and chief information officer (CIO). [6] The position of CSO is a strategic position that concentrates on communicating risks and opportunities related to sustainability as well as bottom line impact. [7]   In struggling companies, the appointment of a CSO is shown to increase revenue growth. [8] In addition to setting sustainability strategy, the CSO monitors current initiatives. [7]

CSO's are also often responsible for:

Decision making

The CSO position is used to inform long-term decision making. [10]   In Europe, the position is a forward-thinking one that interacts mostly with the big picture by incorporating and monitoring mid- to long-term sustainable objectives. [10]   In Scandinavia, companies are more likely than American companies to have a position dedicated to sustainability in their senior management. [11] The top three firms on Corporate Knights' The Global 100 index of the world's most sustainable corporations–Ørsted A/S, Chr. Hansen Holding A/S, and Neste Oyj–are all Scandinavian. [12]

Challenges

Standardization

The utility of the position of CSO has been questioned. [4]   Across industries and companies, there is no widely used standard and therefore the impact of a CSO can differ from company to company. [4]   Larger companies are more likely to be able to take advantage of economies of scale to implement economical sustainability changes. [4]

Symbolic nature

The position of CSO has been attacked as being symbolic and not making a concrete difference in organizations that employ the position. [13]   Studies have shown a correlation between pollution and the presence of a CSO in companies in high pollution industries, directly contradicting the stated purpose of a CSO. [13] When an organization has outside pressures such as regulation, it is much more likely to engage in a higher degree of sustainable behavior. [13] It has also been shown that often in large companies a CSO has a larger impact on decreasing environment-related corporate social irresponsibility (CSiR) than it does on increasing corporate social responsibility (CSR). [14]

Universities

Some universities in the US have appointed Chief Sustainability Officers or Sustainability Directors. The Pennsylvania State University was the first to appoint a CSO responsible for integrating sustainability in curriculum, research, operations, student engagement and community outreach. [15]


The nomenclature of the position of CSO is not standardized across companies. [11]   A common name for a similar position is Chief Officer of Corporate Social Responsibility. [11]   This position may sometimes have a slightly wider range of responsibilities as they are responsible for everything CSR related, not just the aspects of CSR relating to sustainability. [11]   Other common titles are Executive Vice President of Sustainability, Senior Vice President of Sustainability, or Vice President of Sustainability. [11]   These all refer to positions concerned with sustainability, but are not at the c-suite level. [11]

Some alternate titles referring to the person in charge of sustainability are:

See also

Related Research Articles

Corporate titles or business titles are given to corporate officers to show what duties and responsibilities they have in the organization. Such titles are used by publicly and privately held for-profit corporations, cooperatives, non-profit organizations, educational institutions, partnerships, and sole proprietorships that also confer corporate titles.

<span class="mw-page-title-main">Greenwashing</span> Use of the aesthetic of conservationism to promote organisations

Greenwashing, also called green sheen, is a form of advertising or marketing spin in which green PR and green marketing are deceptively used to persuade the public that an organization's products, aims, and policies are environmentally friendly. Companies that intentionally take up greenwashing communication strategies often do so to distance themselves from their environmental lapses or those of their suppliers.

<span class="mw-page-title-main">Corporate social responsibility</span> Form of corporate self-regulation aimed at contributing to social or charitable goals

Corporate social responsibility (CSR) or corporate social impact is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in, with, or supporting professional service volunteering through pro bono programs, community development, administering monetary grants to non-profit organizations for the public benefit, or to conduct ethically oriented business and investment practices. While once it was possible to describe CSR as an internal organizational policy or a corporate ethic strategy similar to what is now known today as Environmental, Social, Governance (ESG); that time has passed as various companies have pledged to go beyond that or have been mandated or incentivized by governments to have a better impact on the surrounding community. In addition national and international standards, laws, and business models have been developed to facilitate and incentivize this phenomenon. Various organizations have used their authority to push it beyond individual or even industry-wide initiatives. In contrast, it has been considered a form of corporate self-regulation for some time, over the last decade or so it has moved considerably from voluntary decisions at the level of individual organizations to mandatory schemes at regional, national, and international levels. Moreover, scholars and firms are using the term "creating shared value", an extension of corporate social responsibility, to explain ways of doing business in a socially responsible way while making profits.

<span class="mw-page-title-main">United Nations Global Compact</span> Non-binding United Nations pact

The United Nations Global Compact is a non-binding United Nations pact to get businesses and firms worldwide to adopt sustainable and socially responsible policies, and to report on their implementation. The UN Global Compact is the world's largest corporate sustainability and corporate social responsibility initiative, with 13000 corporate participants and other stakeholders over 170 countries. The organization consists of a global agency, and local "networks" or agencies for each participating country. Under the Global Compact, companies are brought together with UN agencies, labor groups and civil society. Cities can join the Global Compact through the Cities Programme.

<span class="mw-page-title-main">World Business Council for Sustainable Development</span>

The World Business Council for Sustainable Development (WBCSD) is a CEO-led organization of over 225 international companies. The council is also connected to 60 national and regional business councils and partner organizations.

<span class="mw-page-title-main">Social responsibility</span> Ethical framework

Social responsibility is an ethical framework in which a person works and cooperates with other people and organizations for the benefit of the community.

<span class="mw-page-title-main">Stakeholder theory</span> Management and ethical theory that considers multiple constituencies

The stakeholder theory is a theory of organizational management and business ethics that accounts for multiple constituencies impacted by business entities like employees, suppliers, local communities, creditors, and others. It addresses morals and values in managing an organization, such as those related to corporate social responsibility, market economy, and social contract theory.

Corporate behaviour is the actions of a company or group who are acting as a single body. It defines the company's ethical strategies and describes the image of the company. Studies on corporate behaviour show the link between corporate communication and the formation of its identity.

Robert Edward Freeman is an American philosopher and professor of business administration at the Darden School of the University of Virginia, particularly known for his work on stakeholder theory (1984) and on business ethics.

<span class="mw-page-title-main">Green company</span> Acts, or claims to act, in a way which minimizes damage to the environment

A green company, also known as an environmentally friendly or sustainable business, is an organization that conducts itself in a way that minimizes harm to the environment. Examples of these actions may include the conservation of natural resources, efforts to reduce carbon emissions, a reduction of waste creation, and support of ecological conservation. Green companies often implement environmentally responsible practices across their entire value chain, from sourcing raw materials to manufacturing processes and distribution.

<span class="mw-page-title-main">Corporate sustainability</span> Business strategy that focuses on sustainability as a core aspect of the business

Corporate sustainability is an approach aiming to create long-term stakeholder value through the implementation of a business strategy that focuses on the ethical, social, environmental, cultural, and economic dimensions of doing business. The strategies created are intended to foster longevity, transparency, and proper employee development within business organizations. Firms will often express their commitment to corporate sustainability through a statement of Corporate Sustainability Standards (CSS), which are usually policies and measures that aim to meet, or exceed, minimum regulatory requirements.

A chief strategy officer (CSO) is an executive that usually reports to the CEO and has primary responsibility for strategy formulation and management, including developing the corporate vision and strategy, overseeing strategic planning, and leading strategic initiatives, including M&A, transformation, partnerships, and cost reduction. Some companies give the title of Chief Strategist or Chief Business Officer to its senior executives who are holding the top strategy role.

Stakeholder management is a critical component in the successful delivery of any project, programme or activity. A stakeholder is any individual, group or organization that can affect, be affected by, or perceive itself to be affected by a programme.

Stakeholder engagement is the process by which an organization involves people who may be affected by the decisions it makes or can influence the implementation of its decisions. They may support or oppose the decisions, be influential in the organization or within the community in which it operates, hold relevant official positions or be affected in the long term.

A corporate social entrepreneur (CSE) is someone who attempts to advance a social agenda in addition to a formal job role as part of a corporation. It is possible for CSEs to work in organizational contexts that are favourable to corporate social responsibility (CSR). CSEs focus on developing both social capital and economic capital, and their formal job role may not always align with corporate social responsibility. A person in a non-executive or managerial position can still be considered a CSE.

Social accounting is the process of communicating the social and environmental effects of organizations' economic actions to particular interest groups within society and to society at large. Social Accounting is different from public interest accounting as well as from critical accounting.

Lise Kingo is a Danish businesswoman who currently serves as Independent Board Director at Danone, Sanofi and Covestro. Kingo is also a member of the Advisory Board for Humanitarian and Development Aid at the Novo Nordisk Foundation.

<span class="mw-page-title-main">Corporate environmental responsibility</span>

Corporate environmental responsibility (CER) refers to a company's duties to abstain from damaging natural environments. The term derives from corporate social responsibility (CSR).

Globalization of supply chains and pressure to lower production costs have negatively impacted environments and communities around the world, especially in developing nations where production of high demand goods is increasingly taking place. Since the 1990s, awareness of these negative impacts has grown, leading stakeholders to push companies to take responsibility and actively work to improve the sustainability of their supply chains. It has come to be understood that a company is only as sustainable as the start of its supply chain, bringing about the need for sustainable sourcing. Sustainable sourcing refers to the inclusion of social, environmental, and economic criteria in the sourcing process.

References

  1. ↑ Lianne R. Gourji (January–February 2008). "Adding Sustainability to the C-Suite". Corporate Board Member. Archived from the original on 2008-08-28.
  2. ↑ Schatsky, David. "Annual Sustainability Executive Survey, 2012". Green Research. Archived from the original on 23 March 2012. Retrieved 11 March 2012.
  3. ↑ Gerdeman, Dina (October 8, 2014). "What Do Chief Sustainability Officers Do?". Forbes. Retrieved November 15, 2020.
  4. 1 2 3 4 Kiron, David (July 1, 2017). "Corporate Sustainability at a Crossroads". MIT Sloan Management Review. 58: 11–21 – via Proquest.
  5. ↑ Peters, Gary F.; Romi, Andrea M.; Sanchez, Juan Manuel (November 2019). "The Influence of Corporate Sustainability Officers on Performance". Journal of Business Ethics. 159 (4): 1065–1087. doi:10.1007/s10551-018-3818-1. ISSN   0167-4544. S2CID   158813946.
  6. ↑ Groysberg, Boris (March 2011). "The New Path To the C-Suite". Harvard Business Review. Retrieved December 5, 2020.
  7. 1 2 World Business Council for Sustainable Development (December 2018). "Defining the role of Chief Sustainability Officers (CSOs)" (PDF). EXCEL Q3 Spotlight. Retrieved November 15, 2020.{{cite web}}: |last= has generic name (help)
  8. ↑ Cavazos, Garza (May 1, 2015). "Hiring a Sustainability Officer Can Save a Sinking Ship: Financial Statement Evidence". Journal of Asia Entrepreneurship and Sustainability. 11: 3 – via Proquest.
  9. ↑ Gerdeman, Dina (October 8, 2014). "What Do Chief Sustainability Officers Do?". Forbes. Retrieved November 3, 2020.
  10. 1 2 Rego, Arménio; Cunha, Miguel Pina e.; Polónia, Daniel (2017-06-01). "Corporate Sustainability: A View From the Top". Journal of Business Ethics. 143 (1): 133–157. doi:10.1007/s10551-015-2760-8. ISSN   1573-0697. S2CID   154128934.
  11. 1 2 3 4 5 6 Strand, Robert (February 2013). "The Chief Officer of Corporate Social Responsibility: A Study of Its Presence in Top Management Teams". Journal of Business Ethics. 112 (4): 721–734. doi:10.1007/s10551-012-1568-z. ISSN   0167-4544. S2CID   154119290.
  12. ↑ "2020 Global 100 ranking". Corporate Knights. 2020-01-21. Retrieved 2020-12-12.
  13. 1 2 3 Kanashiro, Patricia; Rivera, Jorge (2019-03-01). "Do Chief Sustainability Officers Make Companies Greener? The Moderating Role of Regulatory Pressures". Journal of Business Ethics. 155 (3): 687–701. doi:10.1007/s10551-017-3461-2. ISSN   1573-0697. S2CID   157727369.
  14. ↑ Fu, Ruchunyi; Tang, Yi; Chen, Guoli (April 2020). "Chief sustainability officers and corporate social (Ir)responsibility". Strategic Management Journal. 41 (4): 656–680. doi:10.1002/smj.3113. ISSN   0143-2095. S2CID   211736468.
  15. ↑ "Shrivastava named top sustainability officer, Sustainability Institute director". June 2017.

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