What: Sustainability used to be disconnected from important business decisions, but now there is an increased focus on environmental, social, and governance issues (ESG) that the current C-Suite does not know how to address. This is where the Chief Sustainability Officer (CSO) comes in.

Why it is important: A well-established CSO can make a real impact by connecting the dots on ESG and supercharging the sustainability transformation. The role of the CSO will undoubtedly grow as organizations continue to put ESG at the heart of their business.

More CSOs have been appointed in 2021 than in the previous 5 years combined. As companies continue to focus on ESG initiatives, the role of the CSO will undoubtedly grow. ESG issues are dominating the discussions of how businesses remain relevant in the years ahead and are being driven by all stakeholders. Governments will start enforcing laws and regulations that will be mandatory for businesses to comply with, consumers are changing their behavior and demanding more sustainable products, and employees are looking to work for employers who share their values and understand the fragility of society. Companies will need to take all these demands into account, and the role of the CSO is meant to address exactly this.

The evolving role of the CSO has revealed key trends:

• The role has been prioritized as a piece of the heart of the business rather than back-office compliance. ESG issues touch upon the entire business, therefore the CSO must be able to deal with this complexity.
• ESG needs to be a key topic for the board and executive agenda. Having the CSO connected to the CEO helps educate and upskill the executive team on ESG issues.
• ESG needs to be embedded into the entire organization. As companies embrace sustainability into their strategy and operations, expertise and knowledge around ESG must spread through the organization.
• There is a growing importance of ESG reporting as there are increased investor expectations around ESG and companies’ willingness to showcase their progress.

The CSO role is complicated as it is intertwined in each aspect of the business. The CSO needs to thoroughly understand the business, especially how sustainability and profitability are complementary or contradictory. They also must be able to identify shifts in the industry landscape and spot related value-creation opportunities for new products and services.

As the CSO role is tied to all areas of the business, eventually other parts of the organization will gain their own sustainability expertise. Although we are far from this, the role of the CSO could eventually become redundant as each piece of the organization will eventually put ESG at the heart of all decision-making.

Empowered Chief Sustainability Officers: The key to remaining credible and competitive