The number of companies appointing a chief sustainability officer has increased significantly over the past few years. Due to the novelty of the role, the actual responsibilities and roles of the CSO are not yet clear. It is important for executives and boards to ensure that the role of the CSO balances all three elements of ESG. The authors present eight different CSO tasks and a visual framework to ensure that each gets the level of effort it requires.
The word “sustainability” doesn’t exist anymore popular in the corporate world. The number of companies appointing a chief sustainability officer (CSO) has increased rapidly: In 2021 more CSOs were hired than in the previous five years combined.
But despite good intentions – and widespread acceptance of the importance of sustainability – there is a lack of clarity about the tasks and responsibilities of a CSO. For example, at a large European consumer goods firm we consulted on, there were many job titles in various units that included the word “sustainability.” The result is fragmented ownership, internal competition for visibility and resources, and inefficiency with a lot of overlap and duplication.
The confusion is not surprising. While other functions and roles, such as CFO or CMO, are well established, the CSO role is almost unheard of until recently. Limited history and benchmarks. This section explains the inconsistent job descriptions, the different mandates and responsibilities, as well as the different reporting lines. Despite their increasing profile, a MInORITIES (35%) of CSOs report directly to the CEO. In most cases, the person responsible for sustainability is restricted to a limited and distinct remit – reporting to the COO when an efficiency role is emphasized; to the CFO when the focus is on investor relations; to the chief communications officer if PR is important; or general advice when the focus is on compliance. In other cases, the paper is distributed among two or three different departments. The separation of ESG is unusual: the “E” in environmental under COO, the “S” in social under CHRO, and the “G” in governance under corporate legal.
We used to be there. Fragmentation and a lack of clarity are common when new roles are introduced; consider for example the rise of the chief digital officer or the chief innovation officer in the C-suite over the last decade or so. Initially their tasks and responsibilities are not well coded, creating confusion about responsibilities, fragmentation, and even tensions with other overlapping functions.
To clear the fog and help C-suites understand the position and responsibilities of the CSO, we created a simple visual framework.
Eight Critical Tasks for CSOs
We designed our “8-task spider graph” for the role of chief innovation officer. As the tool proved to be powerful, we modified it for the newly created CSO position. It divides the role of the CSO into eight distinct tasks:
- Ensuring regulatory compliance. Anticipate regulatory trends and their implications. Establish compliance with sustainability laws and regulations that apply to every industry, process, and business type. Risk management evaluation. Create internal policies.
- ESG monitoring and reporting. Collect data and metrics that follow reporting standards. Benchmark with industry peers. Prepare the completion and communication of the company’s ESG report.
- Manage a portfolio of sustainability projects. Act as a project management office: planning, coordinating, reviewing progress, and tracking results to coordinate various operational efforts.
- Managing relationships with stakeholders. Promote continuous dialogue with internal and external stakeholders to foster good, transparent relationships.
- Building organizational capabilities. Identify gaps and adopt appropriate educational initiatives for skill development and/or finding missing capabilities. Identify new ways to measure new capabilities. Share and disseminate knowledge and best practices.
- Fostering cultural change. Help define and communicate the purpose of driving change. Champion culture change throughout the organization through education as well. Promote changes in thinking based on concrete behavior. Establish routines to reinforce change, for a reliable “walk the talk” from leaders.
- Scouting and experimenting. Promote openness to the external innovation ecosystem. Explore emerging sustainability technologies, solutions, and practices. Test applicability and learn from experiments. Increase adoption in the wider organization.
- Establish continuity of processes and decision making. Change key processes and related criteria/measures/tools for decisions. Coach decision makers in managing complex trade-offs.
Looking at the Eight Tasks
Spider graphs (also known as radar graphs) are often used to display data in many unique dimensions. Plotting the eight CSO tasks — and the amount of effort expended on each — on a spider graph helps executives determine the true coverage of responsibilities, where the focus is now, where where efforts may need to be increased, and where there are gaps. . Visual clarity promotes strategic discussions and attention to what really matters rather than details.
Begin by placing each of the eight tasks on the outer points of the seven concentric octagons, starting at the top and working clockwise. Then have a group discussion to determine how much effort is currently being used in each task and give them a number using the following scale:
- 1–2: Low effort
- 3–5: Medium effort
- 6–7: High effort
Then for each task, place a dot in the octagon corresponding to its level of effort. For example, if you rate task two as a four on the effort scale, place its dot in the fourth octagon from the center.
When we worked with a German manufacturer, the executive team raised many questions about organizational details and specific procedures, but it soon became apparent that they lacked focus and strategic thinking on “what ” and the “why” of the CSO paper. We encourage them to clear up the confusion by creating an 8-task spider graph in an executive workshop setting, before jumping into the dynamics of organizational design.
In fact, visualizing the paper’s current position on the spider graph is an exercise in awakening. The company realized that many tasks were not adequately covered. The role of the CSO appears to be primarily operational and regulatory aspects. Furthermore, in discussing each task, they found an almost exclusive emphasis on climate change.
When the team agreed on the actual positioning, the discussion moved to the evolution of the CSO role and how to ensure a better balance by investing in less tangible dimensions. The executive team updated the graph accordingly.
Here are four tips to help executives use the eight-task spider graph:
Own all eight tasks.
To lead sustainability change in their companies, CSOs must be accountable for all eight things. We have encountered many organizations that focus too much on regulatory and legal elements or external communication but ignore cultural elements or capability building.
Think beyond the “E.”
Each task must be expressed not only around the scope of the environment (as is often the case), but must also take into account other dimensions of sustainability.
Consider “Scouting and Experimentation,” (make seven of the spider graph): In determining the sub-activities of this task, companies must do more than look for new technology for CO2 reduction. For example, the CSO can test new methods for social inclusion in the company’s target communities or new models for more transparent and fair employee compensation.
Explain the stages of evolution.
While it is key to have a target positioning for the mid-to-long term, it is often unrealistic to invest in all outstanding tasks at once. The transition doesn’t happen overnight. Define which gaps will be closed first and which will be addressed later, depending on the context of the company (for example, type of culture, level of expertise, organizational setup) and its sector (for example, types of external stakeholders and regulation).
For example, one newly appointed CSO we interviewed recognized the need to cover all eight tasks in order to achieve wider change. However, pressing regulatory issues prompted him to place more emphasis on tasks one and two of the spider graph. This allows him to concentrate organizational efforts on rapidly closing the most critical gaps (skills, systems, and data) and thus comply with new directives without imposing large fines.
Use the graph for alignment. Don’t put the spider graph in a drawer. Use its visual power to communicate the changing position of the executive team and other units. Transparency and simplicity will strengthen alignment and clarity within the broader organization.
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Finally, CSOs and executive teams need to think hard about what to do – and what to do differently – to successfully implemented their company’s sustainability agenda. Taking the time to visualize the eight tasks of the CSO can help ensure that the role is balanced, covering different dimensions of sustainability.