What is a Chief Sustainability Officer, and why is it important?
What is Sustainability?
The most succinct and widely accepted definition created by the Brundtland Commission
is as follows: "Sustainable development is development that meets the needs of the
present without compromising the ability of future generations to meet their own
needs." So how is that interpreted by today’s enterprise? Sustainability is about
efficiency of resources, energy, water, and materials usage. It is about the ethical
treatment of humans and the planet. Also included are the enterprise’s partners or supply
chain, and their ability to support an enterprise to compete effectively in today’s
marketplace. It is also being expanded to include the sustainability of that enterprise – its
ability to compete and be profitable in the future.
Who is a Chief Sustainability Officer?
In some organizations, the role may be under the venue of Corporate Social
Responsibility, Environmental Advocacy, Environmental Health & Safety, Facilities
Management, Operational Efficiency, Regulatory Compliance, etc. Regardless of the
title, the skillset required for a successful candidate to fulfill the role of a Chief
Sustainability Officer is rapidly evolving. The fact is, depending upon the industry, the
enterprise’s mission, position in the marketplace and many other factors; this role is being
defined more clearly.
As a baseline, the successful candidate would have a multi-disciplinary background:
Financial experience. This gives them the ability to always have a keen eye on the
bottom line. Whether saving money, increasing sales, reducing risk, pacifying regulators
or shareholders, understanding how sustainability affects the bottom line is absolutely
critical. The greenest company in the world cannot be in business if it is not generating
profits.
Operational efficiency is important, as many of the tenets of Sustainability focus around
efficiency, minimizing energy, materials, resources, transportation, supply chain
optimization, etc. Much of the “low hanging fruit” of this role makes adoption of
Sustainability easily accepted by all. Many of these efficiency initiatives are already in
place, but not necessarily associated with Sustainability. They have been adopted
because they make prudent operational sense. If there are regulatory requirements, this
also falls within the purview of the CSO realm.
Technological savvy is critical, as the ability to aggregate and manage reliable (and
sometimes auditable) data to generate reports is necessary. Enterprise Systems are more
often being used for capture and scrubbing of this data, so that it can be mined for
business intelligence purposes, reliable forecasting, and used for accurate reporting. In
many companies a sales background or product specialists desirable. Crafting a
product extension or tailoring a message around a company’s sustainability efforts may
drive increased revenue, such as efforts by GE, branded as Ecomagination, EcoOptions by Home Depot - and IBM’s Smarter Planet Initiative. Or conversely, the
positive Sustainability message can be used to avoid loss of market share. More
consumers are becoming educated on the products and companies from which they are
purchasing goods and services.
Using Sustainability as a competitive advantage is becoming increasingly critical in
today’s marketplace, in almost every industry. Products and services that are healthier,
create less waste, use less energy, have less of a harmful impact on the environment (or
dare I say, have a positive impact!) or promote social justice are clearly more desirable,
and those benefits should be communicated as such. Some companies, such as Whole
Foods develop their core mission around the tenets of Sustainability. The CSO role may
require a communicator or change agent who can rally support at all levels, to improve
the chances of Sustainability becoming an adopted part of company
culture. Communicating the proper message in terms that can be easily understood is
particularly challenging, as this must be accomplished at many levels. Messaging to
stakeholders varies greatly. Proper messaging must be created for employees, executives
and board members, partners, customers, shareholders, the public, regulatory agencies,
etc. Benefits driven by adopting Sustainability Principals will truly span all facets of a
company’s business. And finally, never underestimate the power of passion. Having
someone who is an Eco-Warrior, and takes this function personally is an important
element in the success of a CSO role. Accurate measuring and reporting is critical for all
stakeholders involved.
Why is a Chief Sustainability Officer role important?
At some point in the near future, all major projects should be evaluated from a
sustainability perspective. In all analysis, there should be attention paid to the
environmental and social impacts of that initiative. Only then can an organization reach
its goal of becoming a sustainable entity (See follow up article on the Eco-Enterprise).
It is estimated that as of 2008, 25% of Fortune 500 Companies have a Chief
Sustainability Officer in place, up from 7% in 2000. “We’ve certainly seen a trend,” said
Andrea Moffat, the senior director of corporate programs at Ceres, an environmental
advocacy group that includes investors, in a recent interview. She said that in the past
few years companies had tended to call the position “chief sustainability officer,”
whereas previously it might have been called a vice-president — or senior vice-president
— of sustainability or corporate responsibility. “The most important thing,” Ms. Moffat
said, “was that the position — which generally includes responsibility for human rights
and workforce diversity as well as environmental issues — reports directly to the chief
executive.”
“More and more, Sustainability is becoming an issue requiring Executive or Board Level
attention,” says Ed Schwartz, co-founder of Green Living Solutions. Data integrity and
transparency is quickly becoming the standard, whether by regulatory or voluntary
initiatives, such as: The Carbon Disclosure Project, the Climate Registry, EPA 40 CFR
Part 98 Rule, the Carbon Reduction Commitment in the UK, the National Greenhouse
and Energy Reporting Act in Australia, and the Global Reporting Initiative, to name a
few.
And a final point regarding the CSO role, is that it have support from the highest levels
within an organization. Whether that is the CEO, the Board of Directors, or another
Executive championing the cause, merely paying a nod of attention to this function
cannot assure its success, and has proven to have the potential to be quite damaging. The
reporting and transparency are becoming more common due to “Greenwashing.” This is
the practice of making claims or statements about being environmentally sound, but not
substantiating those claims, or following through with actions that are contradictory to
those stated goals. While all enterprises have a carbon footprint, use resources, etc., they
can foster initiatives that reduce those impacts and produce a triple-bottom-line benefit of
positive financial, social and environmental stewardship.
For additional information, or to hire a CSO/bring in a Sustainability Consultant, please
contact Eco Ed at 201-390-4280, or at ed@greenlivingsolutionsnj.com .