by Ted Ferguson – President of The Delphi Group
Oh, sustainability roles, how you’ve changed.
Once upon a time, Environment, Health and Safety (EHS) officers were the norm, with a focus on compliance and risk mitigation.
Fast forward to today, and these roles have evolved into more strategic functions, culminating in the Chief Sustainability Officer (CSO). The number of large companies with CSOs has been almost doubling every five years, as leading organizations go beyond compliance to recognizing the short- and long-term value of sustainability.
Appointing a CSO also signals internally and externally that a company is taking a strategic position on sustainability – that sustainability is not just about risk mitigation or PR but integrated into all aspects of doing business. The CSO is typically responsible for briefing the Board of Directors on sustainability issues, serving as the voice of sustainability on the executive team and using sustainability to connect business units, and driving sustainability throughout an organization.
As Secretariat to the EXCEL Partnership, The Delphi Group is examining the CSO role on behalf of the group. Our research confirms that many sustainability roles and responsibilities – including the CSO – are ill-defined. In fact, many C-suiters get the CSO role added to their existing responsibilities with little clarity around what they are expected to do. This hampers the effectiveness of the individuals in these roles.
It turns out there are there are a number of common reasons for this lack of clarity in CSO roles:
- The WHAT. Sustainability is a broad umbrella characterized by an inconsistent and often ill-defined list of issues and topics.
- The WHO. The cross-functional or horizontal nature of sustainability issues creates confusion with respect to executive oversight.
- The HOW. Organizations often have a tough time working out how to integrate sustainability beyond compliance and into areas like new product offerings and new business opportunities. This is more acute when a company is relatively new to sustainability, versus a company that has an entrenched sustainability strategy rooted in value creation. Research shows that, when companies have a compliance attitude towards sustainability, they are less likely to have a CSO position.
A CSO Wishlist: 5 Things CSOs Need to Do
Delphi has identified five key aspects of the CSO role. Hiring someone who can tackle each of these will ensure your sustainability efforts are effective and strategic.
- Communication: The CSO needs to be a ‘translator.’ To be truly effective,s/he must be able to to explain how sustainability issues are relevant to different parts of the business, each of which has its own language and priorities.
- Compliance: The CSO needs to understand the compliance landscape to ensure the company complies with environmental and disclosure requirements, as well as social/community issues and considerations.
- Sustainovation: The CSO needs to ensure sustainability considerations are integrated into the company’s innovation and R&D efforts so that new products and services take sustainability – and related emerging opportunities and markets – into account.
- Strategy: The CSO needs to be able to drive the sustainability strategy and also show how it supports the overall business strategy. To do this, s/he needs to understand the multiple components that underpin business success, and the role that the sustainability strategy plays in all of them.
- Investor and shareholder engagement: The CSO needs to engage investors and shareholders to proactively demonstrate how the company’s sustainability strategy is supporting the business strategy. This will ensure long-term support of your sustainability efforts and initiatives.
EXCEL is hosting two roundtables in Toronto and Calgary in Fall 2019 to develop these concepts further. The outcomes of the roundtables will be tested at GLOBE Capital with the financial peers of CSOs, getting their perspective and input on how this role can be most effective. The results will also be shared through the World Business Council for Sustainable Development (WBCSD) and GLOBE’s network.
Ted Ferguson is The President of The Delphi Group and the Secretariat for EXCEL Partnership. The Delphi Group assists GLOBE Series in producing the events like GLOBE Capital in Toronto and GLOBE Forum in Vancouver. For more information about The Delphi Group, please contact Ted directly at email@example.com. For more information on GLOBE Series or its events, please visit www.globeseries.com.
We hope to see you at GLOBE Capital (February 26-28, 2018) in Toronto, where leaders in finance, infrastructure and cleantech meet to capitalize on opportunities in the clean economy.