Are You Helping or Hurting Your Chief Sustainability Officer

Imagine you're at a massive concert, the music is pulsing, the crowd is electric, and at the heart of it all is the conductor. Now, picture your company as that concert. The Chief Sustainability Officer (CSO) is like the conductor, orchestrating the complex symphony of sustainability within your organization. But here’s the kicker: where that CSO is seated—front and center or tucked away in a side office—tells everyone exactly how much you care about the music of sustainability.

Let’s start with the basics. In many organizations, the CSO’s role has evolved from a peripheral function to a critical leadership position. Initially, the idea of a sustainability officer might have conjured images of someone ensuring the recycling bins were properly labeled. Today, it’s a different ballgame. The CSO is responsible for integrating sustainability into the very fabric of the organization, influencing everything from product development to corporate strategy.

But here’s the catch: the impact of the CSO is directly tied to where they sit in the organizational hierarchy. If you, as a leader, see sustainability as a growth engine, a competitive advantage, and a core business strategy, then your CSO should be reporting directly to the CEO. If not, well, they might as well be playing backup to the drummer.

A Direct Line to the CEO: Sustainability as a Growth Driver

When the CSO reports directly to the CEO, it sends a powerful message: sustainability is a top priority. It’s no longer just about compliance or avoiding negative headlines; it’s about leveraging sustainability for growth, innovation, and long-term success. Companies like Unilever and Patagonia, where sustainability is deeply embedded in their corporate DNA, have shown that a CSO with a direct line to the CEO can drive transformative change. It’s not just about meeting regulatory requirements; it’s about reimagining what’s possible.

Take Unilever, for example. The company’s Sustainable Living Plan isn’t just a feel-good initiative; it’s a core business strategy aimed at doubling the size of the company while reducing its environmental impact. With sustainability at the helm, Unilever has seen impressive growth, proving that doing good can also mean doing well. This level of commitment doesn’t happen by accident; it’s the result of a CSO who has the ear of the CEO and, by extension, the entire organization.

Reporting Through a Functional VP: The Influence Dilemma

Now, let’s talk about what happens when the CSO is tucked away under a functional VP, perhaps in marketing, HR, or even operations. Sure, they’re still in the game, but their influence is limited. They might have some sway over departmental initiatives, but their ability to drive organization-wide change is hampered. It’s like asking the conductor to lead from the wings—possible, but far from ideal.

When a CSO reports through a functional VP, it often signals that sustainability is seen as a siloed function rather than a holistic business strategy. It’s less about driving innovation and more about ticking boxes. This setup might be sufficient for meeting the minimum requirements, but it’s unlikely to lead to the kind of transformational change that can set a company apart.

Consider this: if your CSO is buried within a department, how can they effectively engage with all stakeholders—employees, customers, suppliers, and partners—to truly integrate sustainability across the board? The answer is they can’t, at least not to the extent that’s needed to stay competitive in today’s market.

The Compliance Trap: Sustainability as a Risk Management Tool

Then there’s the scenario where the CSO is housed within a legal, risk, or compliance role. This setup often reflects an organization’s view of sustainability as primarily a compliance issue—a box to be checked, a mandate to be met. While this is a valid aspect of sustainability, it’s far from the full picture.

When sustainability is seen only through the lens of compliance, the focus tends to be on avoiding fines, adhering to regulations, and managing risks. While these are important considerations, they’re also the bare minimum. This approach misses the vast potential of sustainability as a driver of innovation, efficiency, and competitive advantage.

Think about it: if your sustainability strategy is driven solely by the need to comply with regulations, you’re always playing defense. You’re reacting to external pressures rather than proactively shaping the future of your business. In a world where consumers, investors, and employees are increasingly prioritizing sustainability, this approach is not just shortsighted—it’s potentially damaging.

Sustainability Through Multiple Lenses:

Sustainability can be viewed through multiple lenses, each offering a different perspective on its value to the organization:

1. Compliance Lens:

   • This is the “we need to do this to avoid trouble” approach. Companies that focus solely on compliance are often reactive, doing the bare minimum to meet regulatory requirements. While necessary, this approach doesn’t capitalize on the opportunities that sustainability offers.

2. Investment Desirability Lens:

   • In this view, sustainability is seen as a way to attract investors. Companies that prioritize Environmental, Social, and Governance (ESG) strategies are often more attractive to investors looking for long-term, stable growth. But if your sustainability efforts are just about looking good on paper, you’re missing the point.

3. Growth Opportunity Lens:

   • This is where the magic happens. When sustainability is viewed as a growth opportunity, it becomes a core business strategy. It’s about taking a deep dive into your operations, identifying areas for improvement, and working closely with stakeholders to drive efficiencies, reduce your carbon footprint, and create lasting value.

So, where should your CSO sit? If sustainability is a core component of your growth strategy, s/he should be reporting directly to the CEO. This positioning ensures that sustainability is integrated into every aspect of the business, from product development to corporate governance.

But if your CSO is buried under a functional VP or relegated to a compliance role, it’s a clear signal that sustainability is not a priority. In today’s market, where consumers and investors are increasingly demanding transparency and responsibility, this approach could be a costly mistake.

The role of the CSO is too important to be an afterthought. Where they sit within your organization is a direct reflection of how much you value sustainability. By placing the CSO at the top of the organizational chart, reporting directly to the CEO, you’re not just complying with regulations or appealing to investors—you’re positioning your company to lead, innovate, and grow in a world that’s increasingly prioritizing sustainability.

So, as you think about your company’s future, ask yourself: is sustainability a core part of your strategy, or just a box to be checked? The answer will determine where your CSO should sit—and how successful they’ll be in driving your organization forward.