The Supreme Court’s July ruling capping the Environmental Protection Agency’s power to curb emissions captures something of the tone of climate policy today in the US. Investors and regulators are on a roller coaster as ESG becomes increasingly politicised ahead of the upcoming midterm elections. It is a different landscape to navigate and sets an interesting backdrop for those looking to integrate sustainability into their companies’ DNA.
Many are turning to human capital as a solution — either expanding existing sustainability teams or upskilling talent. Over the last decade, as ESG has risen in corporate agendas, we have seen an increase in the number of Directors of Sustainability across a variety of sectors. Naturally, the role has evolved over time as the climate crisis worsens, public awareness grows, climate goal deadlines approach and regulation becomes more complex.
ESG is a dynamic space, with continuous shifts even in nomenclature — from compliance, assurance CSR and sustainability to ESG, wellbeing, regeneration and impact. It is no wonder those working in the space find the tasks and skills required of them shifting, too.
The modern-day Director of Sustainability
In essence, the Director of Sustainability ensures sustainability remains an integral part of the company’s business model. Those in this position serve as the rudder steering the ship towards a more sustainable future, keeping it aligned with its planned course.
Historically, the job description for this role was often focused on compliance or quality standards where ISO 14001 and SA8000 featured heavily and would have made much of the need to assess and monitor efficiencies and performance. Whilst still important elements of the role, today companies are asking for a more expansive skillset.
Modern-day Directors of Sustainability are not only required to have comprehensive technical understanding and subject-matter expertise, but also to be able to critically analyse business operations, scrutinising the data and factoring in global trends to identify risks and opportunities. They need to be able to develop, execute and communicate a robust strategy that leads the company to impactful change. They have the ear of investors and the C-suite, convincing them of the strong business case for sustainability initiatives and playing a key part in how businesses make decisions over the long term. Communication skills and the ability to influence have therefore become far more crucial.
Keys to success in times of volatility
When it comes to ESG, each day brings a new headline or scandal. Goalposts and sentiment are ever changing. Within today’s volatile context, with markets teetering on the edge of recession and anti-woke rhetoric on ESG making headlines, Directors of Sustainability need to keep two concepts front of mind if they are to succeed:
First, they need to work to ensure sustainability does not become an isolated silo of work — that it is embedded and integrated throughout the organisation. Top-down and bottom-up alignment is the only way an ESG strategy is going to catch. It’s about engaging and influencing at every level of the business, from the group up to board level and beyond — working with industry peers through the sharing of knowledge and building of true, collaborative working partnerships. Underpinning it all is the ability of a sustainability leader to embrace and integrate issue management in the daily running of a business, bringing peers and senior leaders into the process of change management.
Secondly, these sustainability leaders need to understand and communicate the interconnectivity of the different components of ESG, as opposed to viewing each in isolation. Environmental and social issues are symbiotic; focusing all attention on one alone will only slow any progress. All three pillars need to be addressed. If a business secures a positive rating on social issues such as diversity and inclusion or fair pay but scores poorly on emissions, waste, human rights or pollution, there is still a great deal of work to do.
There are many examples of sustainability leaders succeeding in shifting the needle when it comes to climate and social action. It is positive to see that, recognising that companies with clear and dedicated sustainability ambitions perform better financially than those without long-term goals, many listed organisations are prepared to accept a short- to medium-term drop in profitability when investing in sustainability. This wider-spread adoption of a more holistic approach that factors in critical, non-financial metrics is explained by sustainability leaders effectively steering their company forward. It is time to ensure all staff are on board and rowing together towards the same destination.
Catherine has been recruiting senior sustainability executives and non-executives for over 10 years, across multiple disciplines and sectors — including apparel, extractives, CPG, NGOs and professional associations. She sits on the board of the Future-Fit Foundation — a non-profit offering tools to help investors and business tackle key sustainability and climate change issues.