As sustainability becomes a key aspect of business strategy and planning, the role of the chief sustainability officer (CSO) is evolving to become key C-suite component to meet the requirements of the corporate environment.
By definition, the CSO is a C-suite executive who leads the sustainability agenda of an organization and is charged with developing and implementing strategies that integrate environmental, social, and governance (ESG) risks into the company’s business strategy, and ideally, reporting directly to Board of Directors.
Successful CSOs work across departments, geographies, and industries to ensure that not just sustainability initiatives, but a sustainability culture, is deeply embedded within the organisation. The CSO should be part of all strategic conversations in the organisation, able to identify short-, medium and long-term risks using an ESG lens and build mitigation strategies as part of long-term corporate risk mitigation. A forward-looking CSO should work towards building a triple-bottom line of thinking across all functions.
In India, environmental issues have usually been seen from a compliance perspective which is why Environment, Health and Safety (EHS) function began to morph into a sustainability function, even taking care of GRI reporting, given the operational content of the reporting. Even today, quite a few ESG professionals have an EHS background.
As financial institutions increasingly recognize ESG compliance, as both a risk management tool and a way to attract socially responsible investors, the CSO’s role becomes even more central to the company’s day-to-day operations.
So, what can the CSO do? Having a fully engaged CSO on-board can actually help the organisation reduce costs across functions.
- Risk Management: By identifying and developing strategies to mitigate ESG-related risks, the CSO can help the organisation course-correct to avoid costly operational and regulatory oversights and the resultant damage to its reputation.
- Employee Engagement: Millennial employees are far more likely to stay engaged and motivated when they work in an organisation that demonstrates a commitment to sustainability, thereby reducing the financial and HR impact of high employee turnover.
- Build Reputation: Through his stakeholder network, a CSO can help a company demonstrate its commitment to sustainability and improve the organisation’s visibility among peers, customers, investors, and other stakeholders.
- Innovation: Can lead the company’s innovation with a sustainability lens in developing new and eco-friendly products and implementing new technologies.
- Manage stakeholder relationships: Can promote an ongoing dialogue with internal and external stakeholders in order to develop constructive relationships.
- Build organizational capabilities: Identify skill gaps in the organisation and adopt training for upskilling and/or sourcing the missing capabilities.
- Embed sustainability into the decision-making process: Revise key processes and related criteria/metrics/tools for decisions. Coach decision makers to manage complex trade-offs[1].
***The author is a Strategic Advisor, Write Canvas
[1] https://hbr.org/2023/03/the-8-responsibilities-of-chief-sustainability-officers
