Corporate Sustainability Becomes a Team Sport • With commentary from Acre's Marie Cloherty

16 March 2023 by Marie Cloherty
blog author

​​Commentary from Marie Cloherty for Wall Street Journal, published on 15.03.23, original source: Corporate Sustainability Becomes a Team Sport, Author: Rochelle Toplensky.

Chief sustainability officers have historically been technical experts focused on helping companies decode their carbon footprint. Today’s CSOs are business-transformation specialists who run point for companies in their sustainability efforts, supported by a team of experts.

With the recent flurry of corporate net-zero promises, a host of sustainability regulations set to come in the next few months and rising scrutiny from customers, investors and other stakeholders, the CSO’s role and responsibilities have evolved to meet the moment. As a result, most CSOs are now charged with helping the company figure out how it can transform to deliver on sustainability targets profitably despite a shortage of business leaders with green experience.

“As we see businesses trying to integrate sustainability, we’re seeing the role open up more to people who are strategic, people who are transformers, change agents, disrupters, versus perhaps the subject matter experts that were running it before,” said Rachael De Renzy Channer, global head of sustainability at executive recruiter Egon Zehnder.

The recent anti-ESG movement doesn’t seem to be slowing the hiring of CSOs—last year a record number of U.S. businesses recruited their first ever CSO, according to a survey by recruitment group Weinreb. What’s more, all but one of the CSOs of the nearly 100 publicly listed U.S. companies that responded to the Weinreb survey said they engage with the board of directors, and around three-quarters of the respondents sit on the leadership team, up from less than half in 2011.

“The world has gone from the question of sustainability commitments and declarations, to how are we going to implement them,” said Judith Wiese, chief people and sustainability officer at German industrial technology company Siemens AG. Ms Wiese said sustainability is a horizontal topic with the CSO as a conductor literally orchestrating it across the whole company.

Still, CSOs often have limited authority so they have to be the ultimate integrator and influencer to get so many various stakeholder groups inside their companies to act, said Tara Hemmer, chief sustainability officer of waste-and-recycling company Waste Management Inc. “Getting folks to do things that they might be uncomfortable doing, without really being in that reporting chain, is very nuanced,” she said.

The CSOs surveyed by Weinreb said the top skills they need are strategy and vision, the ability to influence without authority, and the ability to translate sustainability topics into language that resonates with others around the business.

In addition to the internal complexities, the sustainability landscape is changing rapidly. Technologies are being developed and scaled while stakeholder expectations are evolving. ESG definitions and standards are also changing, including mandatory climate reporting and greenwashing crackdowns which raise the stakes of getting it wrong.

“It’s not a static role. You cannot be happy if you achieve your 2023 goals because the social demands or the investors’ demands are moving and they’re moving more and more with time,” said Agustín Delgado Martín, chief innovation and sustainability officer at global power-and-network company Iberdrola SA. “You have to start thinking in 2022 about the demands that are going to be a trending topic in 2025.”

To keep up with it all, many sustainability leaders are building a team to support them, often composed of deep technical experts in the areas most relevant to their businesses. Direct reports to the CSO have doubled to eight from four between 2011 and 2023, according to Weinreb’s survey.

Dow Inc. veteran Andre Argenton was appointed the industrial-materials company’s CSO about a year ago. His team includes experts in technology, industrial processes, financial markets, sustainability frameworks and reporting standards. “The team has an interesting mix and from its heterogeneity comes its strength,” said Mr. Argenton.

Susan Uthayakumar joined Prologis Inc. —a global developer of logistics properties—as chief energy and sustainability officer a year ago, following a long career at Schneider Electric S.E. She has assembled a team that includes people with expertise in grids, energy generation, building green and mobility projects, ESG reporting, measuring Scope 3 emissions and supply chain improvement. Ms. Uthayakumar chose to hire experienced people to quickly increase her team’s capabilities.

However, recruiting experienced sustainability people continues to be a challenge. “The competition for outside talent is fierce,” said Waste Management’s Ms. Hemmer. In addition to hiring externally, Ms. Hemmer created a sustainability rotational program to cross-train her team and has also brought in a few other leaders from within the firm. Mr. Argenton at Dow has also tapped into an extended network of experts throughout the company.

The shifting skill set for CSOs may help those companies looking to hire someone. Marie Cloherty, executive director of sustainable business at green-focused recruiter Acre, suggests looking for someone within the company that has successfully led a transformational change. “They’re a cheerleader, a champion. You give them any theme and they run with it. It’s actually those individuals who are very well placed to pick up the sustainability agenda and then you can hire in the technical expertise,” she said.

There are also a few experienced CSOs who have already led their company through a low-carbon transition, though those with such a background are in high demand. “They want to make sure that wherever they go, they’re really going to have impact and so they’re being really picky about who they talk to,” said Sarah Galloway, co-lead of recruiter Russell Reynolds Associates’ global sustainability practice.

One example of an experienced CSO is Erin Meezan who led the decarbonization of flooring supplier Interface Inc. over her 18 years with the company. Last year she became the CSO at Jones Lang LaSalle Inc., a global real estate and investment services firm.

“There are a lot of people of my generation—that first generation of CSOs at places like Salesforce and Levi’s and other places—who have recently jumped because they’ve said I’ve built a program, it’s embedded, it’s been very successful. How do I go somewhere where I can make a bigger impact this decade?” said Ms. Meezan.

Marie is Acre UK's Executive Director of Sustainable Business. With 13 years’ commercial experience spanning business development and team leadership, Marie has placed multiple executive-level positions across multi-stakeholder initiatives, consultancies and industry & now oversees our Sustainability Team. ​From field to board room, she understands the crucial soft skills that enable purpose-driven professionals working to leverage the power of private finance to ultimately solve some of the world’s greatest modern challenges. Her areas of expertise span executive search, interim, advisory and leadership assessment across the broad sustainability agenda.

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