The Executive and How Sustainability comes to Him/Her

There have been various discussions around who needs to get sustainability as a business concept and who has to drive it in order to achieve the inevitable organisational change. So far, the majority vote is that the Chief Executive needs to embrace the journey to sustainability in order for business to move. This might still hold true for now but does it have to be that way going forward and if the change does not happen without the CEO driving, does this happen on a big enough scale?

The Organisation Chart and Where to Find CSR

There are a number of elements and angles to this and it is worth looking at the organisational chart of companies and corporations. Historically, the newly introduced departments were IT, Health & Safety, Compliance and more recently CSR or Corporate Social Responsibility (there’s a debate to be had whether this is the appropriate terminology but that discussion is for another time).

As additional responsibilities were added due to business innovation, most prominently with the introduction of IT, these functions were added at the right end of the org chart of any corporation as this was the area where less business-related and, one could argue, inconvenient functions were added. Picking up on the above ranking, CSR is the furthest to the right in any hierarchy which hints towards its significance and its reputation within the whole organisation.

Historically, one of the more recent moves was for Health and Safety Officers or Managers to be recruited and for quite a while, these were also expected to deal with environmental issues and challenges. But as the complexity of supply chains and environmental impact assessments increases by the hour, it became apparent that the CSR function, as it grew out of necessity, requires specialists rather than all-rounders with environmental backgrounds and rather than H&S generalists.

The CSO Profile

These days, big corporations are starting to build specialist sustainability teams with people coming from backgrounds relevant to their sector including NGOs or academia. That way, the specialist and niche knowledge is taken in house, which is a good thing. These teams are assembled under the leadership of the Chief Sustainability Officer or CSO in short. This changes the recognition and importance of sustainability within the company and it is the first step to position it as part of the general business strategy.

There are probably two main types of CSO: the candidate with the specialist environmental expertise coming in from the outside, and the in-house generalist who doesn’t have an environmental background but knows how to play the organisation in order to manage change through successful stakeholder engagement and management.

From our experience, both candidate profiles are equally well positioned to perform well. The outside specialist needs to learn the ropes, networks and internal decision making whereas the insider needs to identify the relevant themes and how to resource the subject matter.

The Challenge Facing CSOs

Whilst as just concluded, both candidates are equally well positioned, their key challenges and risks of failure are not small. Whilst the in-house person knows the organisation and the decision making inside out, he or she does not really know what is needed for a particular subject and what the ultimate goal for a particular issue might be. He/she will be able to achieve buy-in from within the organisation but might struggle to communicate the requirements and the vision.

The external specialist knows exactly what is required, he/she can formulate the ultimate vision and what the milestones are to get there but they are lacking the internal network, and whilst being used to a different setting and probably language, they might even struggle to communicate credibly.

CEO and CSO

Having said all that, how do the ultimate decision maker and the sustainability guy actually communicate and work together? In practice, this is still far from being perfect. Reality shows us that unless the CEO understands sustainability and embraces the business opportunities that come with it, the sustainability people are more often than not struggling to gain sufficient internal traction. Let us focus on the CEO who is not enthusiastic about becoming more environmentally friendly and where the business is still done as usual, as unfortunately this is rather the norm.

The disconnect between CEO and CSO is that they think and communicate differently. The CEO’s focus is on business and growth strategies, results and what needs to be done to get to them. At the same time, the CSO is struggling with the internal street cred, thereby putting the role into a defensive starting position rather than in pole, which is not helped by new insights and concepts as other companies progress on their journey to sustainability.

These different positions and approaches to life do not make for an easy conversation as the CEO is likely to lose patience with the CSO and the CSO will not be able to apprehend fully where his Executive is coming from or what he might be trying to achieve.

Talking to an enthusiastic CSO who doesn’t have a clue what his CEO or Board think is not a very pretty experience and not a lot of opportunity lies within that.

A Possible Solution

Instead of everyone focussing on taking the sustainability concept to the Chief Executive, which is almost certainly doomed to fail due to rivalling priorities, how about bringing the Executive approach to business, and the language that goes with it, to the CSR people?

Can you imagine a meeting where instead of stretching the CEO’s patience with tree-hugging-like explanations, the CSO actually talks business case, ROI (return on investment), capital requirements and payback periods. Does that not create much more joint opportunities for both the CEO and the CSO to position the business for the future and ahead of the competition?

We are currently exploring trainings and courses about how to bring business to the CSR people together with some partners. Do get in touch with us if you have any thoughts or find the concept interesting.

To conclude on a positive note, picking up from the above org chart topic, some innovative companies are positioning CSR / environmental specialists within their operational units, i.e. the important ones on the left side of the hierarchy. This makes for a much more focused challenge and conversation integrating business and sustainability targets.

Whilst this innovative approach will surely result in challenging conversations at business unit level, at least these conversations are very much focused on business and are more likely to result in positive progress towards lower impact operations.

Jochen Kleef
Chairman, Ecopoint www.ecopoint.asia
Founder & CEO, Kleef & Co www.kleef.asia

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