There are a lot of good reasons for companies to focus on sustainability, but who is the best person in the organization to take responsibility for sustainability in your company?
Each of the CxOs got different interests
The Chief Executive Officer (CEO) is in principle responsible for the whole organization and sets the company’s vision, so that is one natural place to place the responsibility for sustainability. The CEO is also the one that got the contact with the board of directors, different stakeholders and is the public face of the company. The CEO however is often a busy person and do not have the time to take the daily leadership.
The Chief Sustainability Officer (CSO) is another natural place to place the responsibility for sustainability. The CSO hopefully got experience and knowledge around sustainability to ensure all the aspects of sustainability is well managed and reported on. Some companies however experience that the CSO often ends up leading a parallel department next to the rest of the organization.
The Chief Financial Officer (CFO) is normally working with numbers and is used to being audited. Often the CFO is therefore really focused on ensuring the organization lives up to all rules and regulations including measuring and reporting on required sustainability metrics. Several of them however also got their eye on ROI, which may create conflicts between the funds needed for changes in connection with sustainability and the investments needed.
The Chief Marketing Officer (CMO) has an interest in communicating all the sustainability success stories to show the world how well the company is doing. They know the importance for the stakeholders, customers and employees to read the good stories about their company. The CMO however often has very little insight into what changes are needed to become more sustainable. More and more cases are also arising around misleading communication and greenwashing.
The Chief Technology Officer (CTO) is responsible for the technologies that stores the sustainability data, can make the reports and analysis of the data to gain the insight needed to make changes. “You get what you Measure” is a saying that holds a lot of truth. The CTO is an important support for the sustainability area, but not really a natural place to place sustainability.
The Chief Human Resources Officer (CHRO) got the responsibility of the human resources in a
company and is also responsible for creating a place where employees want to work. Traditionally
there has been focus on ensuring the company had good leaders, good working environment, good salary and possibility to develop as an individual. The CHRO is increasingly feeling a higher
demand for transparency from their employees and sets higher expectations around etic, moral,
culture, sustainability etc, so the CHRO got large interests into the sustainability agenda to make
sure good employees stays, but often not the knowledge to be responsible for the whole
There are several other CxOs that could be mentioned here that plays major roles eg purchasing, supply chain, operations etc,, but lets go up in the helicopter for a moment.
Strategy, Direction and Responsibility
The Board of Director creates the strategy for the company with sustainability as a natural part of it, approve a budget that supports it, set a realistic plan for when to reach the different goals set, ensure the right skills to make sustainable decisions are in place either via appointing an experienced sustainability person to the board of directors or/and create a sustainability advisory board.
The CEO set the direction, makes sure the organization got the right tools and support to make sustainable choices and changes. It is a balance between setting ambitious goals, but at the same time giving the organization freedom to innovate with all employees in the company. If the sustainability strategy does not get any longer than to the CxO layer then the company will not transform.
As mentioned earlier then the CEO does not have the time to follow up and be involved in all the sustainability projects, so the responsibility for orchestrating the collaboration across the organization, facilitation of dialog, program management of the initiatives, being on top of what happens around sustainability outside and inside the company is the CSO, who organizationally should be place right under the CEO.
Depending on the size of the company I would though recommend to split some of the responsibility for sustainability out to some of the CxOs that got specific domain knowledge making them good candidates to take that responsibility on their shoulders and be more directly involved.
The CFO could be responsible for doing the sustainability reporting and verify all numbers the company want to communicate with auditors. Additionally make sure the allocated budget for sustainability is well spend.
The CMO will be responsible for communicating the audited data to stakeholders, customers, employees and others that may have interest.
The CTO should ensure technology is in place that can support all the different types of measurement, reporting and analysis the other CxOs.
The CHRO ensures a good workplace for the employees and got the responsibility for ensuring all
employees get heard, involved and receives training, plus create a clear company, employee and
CSR purpose everyone can unite around. Feeling included in the sustainability work is important
for the motivation and contribution toward a more sustainable company.
A few cases
Below you find three examples that gives an idea about why it makes a difference, where the responsibility is placed:
I worked for a longer period of time with the CSO in a company. The CSO was ambitious, had deep domain knowledge around sustainability and the industry they were in, was well connected internally and externally, and had lots of ideas that he partly initiated. The reason for writing partly is that he had no budget, so every initiative required him to ask for funding, doing lobbyism in the organization etc. It was tough and one day it was announced that the CMO would now resume responsibility of the sustainability area and the former CSO would become a regular employee in the CMO department. The very first dialog my colleagues and I had with the new CMO sounded approximately like this: Please get me all the data around C02e on all the products, so we know how much offsetting we need to purchase in order to communicate zero emissions on the individual products. For me that was a very important indication of that the focus had changed from actually wanting to create a more sustainable company toward, what the company could communicate.
I worked with a CSO and a CTO in another company to create the transparency in the data from certificate of raw materials till product environmental footprint. We used Design Thinking in our workshops with each of the process owners to understand the processes and data flow. This interaction with the process owners gave each of them insight into the needed sustainability metrics and for what they were used. The feedbacks we received back from the process owners was they felt heard and for the first time understood why they should report different numbers and how they could improve (rather than just do reporting). The CSO following told us that from having had to pull data from the different process owners now the process owners started coming with suggestions for how they could report more precise and suggested improvements to become more sustainable. For this company it was a complete change that these design thinking workshops were held. They went from having a sustainability department that worked in parallel to the rest of the company to having sustainability embedded into the different process areas. The IT department at the same time gained insight into what is actually happening in the business when, and how that generates data flowing through the different systems.
Once we got a call from the CSO of a large global company. He told that they had just collected all data for their yearly report and now he had two major problems.:
- The numbers looked worse than last year. Meaning they had made no progress.
- The auditors would not approve the numbers, as the company could not prove that they had collected the data in the same way as the year before.
The CMO had already written some of the stories (without knowing the numbers), the CEO expected to see progress that could be reported to the Board of Directors and the CFO also wanted to include information about the investments they had done in sustainability had paid off.
All responsibility was on the shoulders of the CSO, who could not deliver. His employees had just spent around two months collecting the data and the employees were tired.
The year before an external company hired by the CMO had helped them collect the data and now they honestly had some problems finding out where the different numbers came from, but they did not want to spend money on having them come in again. He asked if we with some kind of IT system could help them try to pull the data out of the systems in another way than the manual collecting they had done for the past two months. We ended up having a meeting with both their external auditors, the CFO, the CEO, the CTO and the CMO to understand what their needs and expectations where, but also to discuss responsibility, as we honestly felt sorry for the CSO, who everybody blamed. It led to a talk about what options there were for extracting data, but also to recommend them to consider implementing an automated way of collecting data in (near) real time, so they all could follow progress or lack of progress all year in a transparent way in their areas. That way they could avoid the problems they were in this year and take responsibility for the numbers in each their areas. Implementing such a system is however expensive, so as far as I know then they are eating the elephant in bites right now by implementing different tools (incl extracting the data to excel on regular basis) over a period of time, but most importantly for this company it led to that they now work together rather than expecting others to be responsible.
Based on my experience from having worked with several global clients primarily based in Europe then there has to be one person that is overall responsible for making sure the strategy set by the Board of Directors is followed, and that is the CEO supported by the CSO. The CEO is the best person to be responsible because it sends a strong signal to everybody inside and outside of the company around, how serious this company takes sustainability and it should be part of the measurement of the CEO has to meet to get bonus, salary raise etc
The CSO (Chief Sustainability Officer) however, needs to be the one taking care of the everyday management of the area and facilitation of the dialog across the organization.
Based on my experience it is however very important that every CxO takes responsibility for sustainability from design to waste and beyond in each of their own areas. Both because they know their own areas best, but also because decentralised governance makes each of the employees take more responsibility in the daily work. For more inspiration, read this article on Engaging Employees to Create a Sustainable Business
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