Who Is the Chief Sustainability Officer?

There are only a few dozen chief sustainability officers in American companies, although their number has been growing rapidly. A new study by George Serafeim and Kathleen Miller explains who they are, where they come from, and how to make them more effective.
by Dina Gerdeman

Since the start of the 2000s, a high-level corporate position has evolved that is still something of a mystery. As companies have engaged in more efforts around sustainability, environmental and otherwise, the "chief sustainability officer" has been created to champion and monitor these efforts.

But despite dozens of individuals in some of the world's largest companies taking on these duties, the role has been little studied. Just what are chief sustainability officers (CSO), where do they come from, and how much influence do they exert?

“The appointment of the CSO reflects an underlying need for companies to not only monitor but also improve their performance”

"Companies are monitoring the impact they're having environmentally and on society, and the appointment of the CSO reflects an underlying need for companies to not only monitor but also improve their performance," says Harvard Business School associate professor George Serafeim.

To create more understanding about the position, Serafeim wrote the paper "Chief Sustainability Officers: Who Are They and What Do They Do?" with Kathleen Miller, CEO of Miller Consultants. Their results suggest that CSOs are of critical importance in successful sustainability efforts, but ironically become less central as sustainability efforts blossom.

Although often linked with environmental issues such as water and energy use, a growing number of companies are taking sustainability efforts much further by improving working conditions in their supply chain, creating better safety procedures, and reaping profits from products that address environmental and social problems.

"Regulators and investors are asking for it, customers are demanding it, and employees are expecting it," Serafeim explains. "Once you reach a point where a customer says, 'What are your policies in terms of your supply chain operations?' you better have a good handle on that."

Enter the CSO.

The position of CSO has been created at an increasing number of companies over the past few years. In 2003, twice as many companies had fulltime sustainability officers than in 1995, and between 2003 and 2008, the number doubled again, research shows. (The first CSO with that title in an American publicly traded company is believed to be DuPont's Linda Fisher, appointed in 2004.)

Three Stages Of Sustainability

To study a CSO's responsibilities and to look at how the role shifts depending on the company's level of commitment, Serafeim and Miller surveyed 66 CSOs and people with similar duties but different titles in 27 industries. They found that companies are often engaged in sustainability at one of three stages:

Compliance: In this initial phase, companies often start with activities related to complying with regulations. Activities are not strategic or centralized. In addition to compliance, employees may volunteer to work on recycling projects or green teams. Most companies at this stage have not created a formal CSO position.

Efficiency: Next, companies become more strategic about sustainability by finding ways to achieve efficiencies that will save corporate dollars, such as cutting energy and water use or reducing waste generation and carbon emissions. "These things are an easy sell," Serafeim says. "They're a good thing to do and the obvious thing to do."

At this stage, more companies are likely to hire or appoint an official corporate sustainability officer, who works with the CEO. The CSO is often tasked with building a business case for making changes that improve the company's bottom line, while also protecting or enhancing the company's reputation. "The CSO is really driving the execution of the sustainability strategy," Serafeim says. Many companies end up hovering in this phase without moving on to the final stage, innovation, the research shows.

Innovation: A select number of companies shift to a more advanced innovative stage by integrating sustainability into the core of the business in ways that transform the company. Strategies tend to be driven by the market with an eye on maximizing long-term profitability, and sustainability efforts often look to address bigger problems in society, including climate change, water management, and obesity.

Study findings imply that in this stage ultimate responsibility for sustainability shifts from CEO to CSO. The CSO's main responsibility is to help develop a sustainability strategy as well as map out how changes will be made, and the CSO must often unify subcultures within the firm.

But the CSO also delegates more sustainability responsibilities to various departments. So while at the Efficiency stage the CSO concentrates responsibilities, at the Innovation stage he does exactly the opposite: He delegates decision rights and makes functions and business units accountable.

"What companies are doing at this stage is refocusing their strategy from an inward perspective to an outward focus," Serafeim says. "How can we enable our customers, suppliers, and others to behave and operate in a more sustainable way? It allows you to envision new markets, new opportunities, and new needs. Very few companies have reached this stage."

Boosting Commitment

Many companies don't make it to the innovation stage because they focus only on short-term goals like the cost savings they achieve from reduced energy use, rather than taking risks with more ambitious sustainability plans.

"Many organizations are afraid to raise the stakes and make bigger bets," Serafeim says. "It's not easy to make that transition. That's why you need the CSO to make a push to move on, become more ambitious."

Nike and Dow Chemical are examples of companies that have made it to the innovation stage. After Nike faced accusations about violations of human rights by subcontractors, it made drastic changes to operate more responsibly in its supply chain. At Dow, company officials used its science capabilities to develop components for solar panels and are now working on materials for cars that make them safer and more efficient.

"Dow is using its science background to address fundamental issues and problems we're having," Serafeim says. "That's a whole different level of sustainability strategy. And it's trying to understand how those environmental, social, and governance issues create value in the long term."

Successful Sustainability

The CSOs in the study made a variety of suggestions for success:

  • CSOs should plant themselves as close as possible to the corporate areas where sustainability can produce value for the company. Initially, CSOs need to work with company officials who oversee compliance and issues. As sustainability goals become more ambitious, the areas where sustainability will produce value will vary from company to company.

  • CSOs should have their finger on the pulse of the company culture, understanding what motivates employees and devising a strategy for implementing change that aligns with the workforce. Sometimes the strategy needs to be customized to work for offices located in separate geographic locations. "If you come up with a strategy that the workforce is not going to buy, you will have a very tough time implementing that strategy," Serafeim says. "The strategy needs to be compatible with what employees are expecting, the skills they have, and their aspirations."

  • Some say the CSO should be placed on the executive team because the mere presence of the CSO at the C-suite table keeps sustainability on the agenda.

  • It's important to articulate a compelling business case for such efforts and to make the strategy understandable and relevant to internal stakeholders. CSOs are often challenged with pushing company leaders out of the "trade-off" mentality. "For years there was this institutional logic that says if you do the right thing, your competitiveness will be hurt and it will come at a cost to the firm," Serafeim says. "People don't understand that if you do things strategically, you can create significant value for the firm. The CSO is in the best position to change this perception, but he needs to have the data and the tight business case to communicate that."

  • CSOs should focus on a manageable set of sustainability issues, rather than biting off more than they can chew at once. And they should keep in mind that sustainability goals will change over time. Edelman says his approach is "evolutionary, not revolutionary." IKEA CSO Steve Howard says, "You can't transform everything at once. The hardest thing about leading the change is managing the complexity …"

Serafeim agrees that companies need to constantly rethink and revise their sustainability strategies.

"Sustainability is not something that's static," Serafeim says. "It has to be dynamic because social expectations are continually changing."

It helps to have a dedicated employee—the CSO—steering the ship.

"The way to think about the CSO is it's the person who is the change agent," Serafeim says. "It's the person who sees how the future is developing, how social expectations are changing, how regulations and the business environment are changing in the future. The CSO is the ambassador with the vision, the person who decides what needs to change when it comes to how the company is interacting with the communities and the broader societal context in which it operates."

About the Author

Dina Gerdeman is a senior writer for Harvard Business School Working Knowledge
    • Meade Sutterfield
    • retired CEO, PowerFone, Inc
    If you want a look at sustainability look to the life of Ray Anderson, the CEO of Interface Carpets. Ray was a brilliant man who turned his passion for the environment into cost advantages as he stripped dirty and harmful chemicals from the manufacturing process and made his competitors follow to stay relevant. Sustainability can become a competitive advantage, as it did in carpets and did with the quality revolution 40 years ago, but only the CEO can make it happen.
    • Robert Kasameyer
    • President, Green Status Pro
    Many companies think of compliance as a necessary evil that exists on the cost-containment side of the business rather than the revenue-producing side. Sustainability has a lot to do with supply chain transparency, and the impact can be large. In the case of Conflict Minerals no one wants any part of the money they paid to buy a cell phone or a wedding ring to support human atrocities. Companies in that supply chain can look at compliance as a cost to minimize or an opportunity to step over their competition. Sustainability Officers must see the opportunity and get their companies to capitalize on it.
    • N.R.Jothi Narayanan
    • HSE Consultant(gas/oil/chemical), Palakkad-678001-INDIA.
    Very interesting to note that the first CSO in an American publically traded company is believed to be Du Pont's Linda Fisher, appointed in 2004.
    Indeed, the field representatives of company are the sensors who are knowing the pulse of the company's reputation by interaction with its customers.
    The year 1977 was a special year for Du Pont for its 175th anniversary.
    STATIC -ERA ( Monopoly)- 1800 to1900.

    The first one hundred years Du Pont had only technical and marketing personnel. The first hundred years are the years for inception, learning, excelling through R&D and needless to say that the period of 1800 -1900 was for Du Pont in the field of explosives. I could say that this period is 'STATIC" because Du Pont was the authority or a reference book for the explosives in America. The question of sustainability was irrelevant in terms of its monopoly in the business.

    Static -->Kinematic ---> Dynamic phase ( 1900-2000).

    The second hundred years of 1900 - 2000, I could see a great emphasis on Du Pont's diversification mainly due to the challenging global competitors operating from the US and also in European Countries. No one deny that the sustainability of a multinational company is based on its marketing strategy i.e efficiency of its technical & marketing personnel in the era of competitive -business.
    This era of Du Pont, I could say that Du Pont had moved from the Static - phase into Kinematic and then dynamic phase. In 1974 Du Pont announced that it would be out of the Dynamite manufacturing business by the end of 1976 to provide highest level of safety to the customers of explosives, the public and Du Pont Personnel.
    ( Corporate's public responsibility).

    Birth of the first CSO - 2004.
    I think the challenge to ensure its success story really made this corporate giant to identify a faculty on sustainability. The recognition of CSO has of late assumed a bigger role than a business strategist since CSO outlines the responsibility of the group leaders and exposing their output to the stakeholders of the company.
    But the real talent of the CSO lies in executing his/her challenging task without rubbing the wrong side of the honest & dedicated performers of a company who always think and work by adopting a philosophy " the survival of their family also depend on the sustainability of the company". Fortunately the multinationals incepted in the period of 1800 to 1900 had unquestionable reputation for their product but today the sustainability largely depends on the customer satisfaction on their product for its competitive price with performance satisfaction.
    The balance between price and performance ( quality& safety) counts the sustainability.
    The views expressed in the above comments are solely of my analysis.
    • Roger L. Young
    • Offoce Administrator/GSA Fleet Manager, US Army Human Resources Command
    As a company CSO, it's really important to be a person with might, courage, strong minded, dedicated to be a great leader in a convincing business case for such efforts and to make different strategy understandable and relevant to others. There are times when CSOs are often challenged by pushing company leaders harder to be mentality tough and ready. There were many years where companies, businesses, etc have done the right thing, but when there is so much competition, someone will get shut down, doors could end up closing which will be hurt their pockets and it will come at a cost to a firm, and there are some people who just don't understand that if you do things your way, you can create problems for your company instead of doing things as a TEAM which does give significant value for that company or firm. The CSO is in the one to get the work done and has the best position to change this perception, but he needs to have all of the ri
    ght people, data, mind frame, and the tight business case practices to communicate with everyone.

    A CSOs job is to focus on an organized foundation with strong dedicated people handling substantial issues, rather than taking on more than they can handle at once. And they should keep in mind that situation and goals will change over a period of time. According to Edelman, "evolutionary, not revolutionary," meaning something changes naturally and originally, rather than through forced change. I loved this post because there were so much good information.
    • Kapil Kumar Sopory
    • Company Secretary, SMEC(India) private Limited
    A Chief Sustainability Officer (CSO) is a generalist executive whose sole concern is that the business he is connected with should flourish. The role is still developing and there is no tailor made or pre-set formula which could be applied for all CSOs. The role evolves differently for each organisation depending upon the felt needs for ensuring that there is all round progress and proper long-term growth. A successful CSO will be a visionary with deep insight of all the activities being carried out, the pluses and minuses in the operating scenario, the level of compliances, attention to all stakeholders, environmental concerns, risks,etc. and much more. The canvas is wide and it seems only sky is the limit. With so many onerous responsibilities devolving on the CSO, his success depends on the responses from the top management and the Board. There has to be a proper appreciation of what huge responsibilities have to be shouldered and the
    needed support should be provided to ensure success of the efforts and endeavours of the incumbent and his team. At no stage there should be any direct or indirect indication that this is a routine assignment and that the CSO is one amongst many. For, if that happens, it will discourage and turn the CSO away. Thereby, loss to the organisation.
    Good CSOs have to be created, mentored and nurtured. Their opinions and suggestions need to be examined critically and never brushed aside without indepth study.
    CSOs are bound to become an important part of all good organisations in times to come.