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Market News

 March 24, 2007
The Business Case for a Chief Sustainability Officer

 As the world grapples with environmental crises, businesses need holistic leadership to fundamentally reinvent how we approach sustainability. Rick Walker makes the case for the Chief Sustainability Officer.

As we look across the landscape of sustainability today, we see a tremendous variety in titles and skills leading their companies' efforts. At companies across industries, you will find Investor Relations, Public Relations, Environment, Health and Safety, Facilities, Procurement, Risk Management and other, even less likely groups leading the charge.

There is nothing inherently wrong with any of these disciplines taking the lead. Most frequently we see two conditions: Either the person leading the effort was a "self-selector" that has an interest (if not a passion) for the subject; or the person leading the effort is in a default position. In this case, the effort logically passed to a particular individual because of a condition in the marketplace.

While this type of selection may have been appropriate in the past, it does not represent how sustainability should be planned for and staffed in the future. As the world grapples with environmental crises, we need to fundamentally reinvent how we approach sustainability.

Sustainability cannot exist in a vacuum. The reformulation of sustainability leadership will need to be able to view the topic through a multitude of lenses. When it resides in a business, it must understand and speak the language of the business and not just the language of sustainability.

When it resides in an educational environment, it cannot just speak the language of that environment or of sustainability, it must speak the language of employers and the disciplines that the education touches.

There are four areas where sustainability tends to reside currently: Environment Health and Safety, Public and Investor Relations, Corporate Responsibility, Facilities or Real Estate. Placing the topic in any of these areas has certain logic. But placing it in any of these groups has certain actual or perceived limitations as well.

EHS groups are excellent at compliance and tracking and have the tools to do so. But the compliance mentality would not translate to innovative business practices, and these groups are often disconnected from most revenue portions of the business.

Public Relations & Investor Relations departments are the "Voice of the Corporation" and can influence both internal and external perception. Unfortunately, they are rarely integrated into creating or driving business strategy, and they can be viewed from the outside as "spin."

Corporate Responsibility often has excellent access to an organization's leadership. The drawback is that these efforts are viewed as a business cost, and the vision tends to be limited to the "expectations" of the organization.

Facilities or Real Estate is where the rubber meets the road in actual implementation of energy reduction strategy and implementation, and thus GHG footprint, but again they tend to be support functions and not involved in creating or driving business strategy.

The same type of list of strengths and weaknesses could easily be assembled for sustainability being placed in engineering, finance, operations or even marketing.

Those that say sustainability should be driven into every aspect of the organization are of course correct. However, at this point in time, responsibility for the coordination and advocacy to make change happen needs to be vested somewhere.

The Case for a "Chief Sustainability Officer"

What's missing in most organizations today is the position of Chief Sustainability Officer: a person that wears many hats. A CSO is an advocate and educator, a visionary, a change manager and a cheerleader, and above all else, a results-driven manager.

CSOs must serve at least three roles: They must look inward, end-to-end driving business opportunity; they must look outward, walking the talk and communicating with customers and other stakeholders; and they must lead. A CSO must articulate, implement and sustain the organization's vision of sustainability and provide visibility and transparency of that vision both internally and externally.

This is not easily done. Internal and external stakeholders will stretch out along a continuum of belief and adoption, tempered by personal opinion of the "cost effectiveness" and return on investment of any expenditure in something as soft as sustainability.

Employees, suppliers, customers and investors will range anywhere from grudgingly doing what is required by law, to actively driving sustainability principles into business strategy; product planning; manufacturing; distribution; facilities & travel.

To properly empower a CSO's office, it must have visibility and support from the top, have an understanding of the organization's culture, and have the patience and understanding of the parent of a middle child.

In looking inward, the CSO should foster examination of the organization's products, services, processes and procedures. Some of the fundamental questions this process raises will be challenging to address. Does the company take the full product life-cycle impact into consideration in materials used, energy consumed making, delivering, using and recycling the product? Can services be delivered without on site physical presence, thus avoiding service vehicles? Are facilities benchmarked against their peers for a truer understanding of efficiency? Can employees effectively telecommute a certain percent of the time? Can organizations recognize that how they've worked in the past may not reflect how the organization or customer will work in the future?

In looking outward, the CSO must perform a number of important tasks. He must gauge the pulse of the market at large and effectively communicate the state of the market, its movement and speed to the organization for the development and delivery of effective solutions.

She must recognize that customers (whether they are buying industrial goods or education or consumer products or buildings) are rapidly moving towards a much higher degree of sustainable sensitivity in their purchases.

He must help the organization understand what the expectations are and how the organization provides the visibility and transparency for the customer to see what the organization is doing.

And she must also accept the responsibility of being a pragmatic businessperson. Organizations cannot relentlessly pursue a goal of sustainability through unproven methods or through weak or non-existent metrics. An example might be justification of something solely base on "improved productivity." Unless the metrics are built and verified and made clearly visible to stakeholders to capture that improvement (even if it seems logical) broad adoption of that improvement will be unlikely.

These are substantial, if not overwhelming, responsibilities for one office to undertake. Which is why the last and possibly most important issue is that of leadership. It is unlikely that the CSO will have the organizational structure surrounding them that provides direct power to affect change. But in a sense, that is unimportant. Leadership only occasionally comes from the organization's leaders.

Of course it is true that the highest levels of the organization must support the CSO and their efforts fully, but the CSO must have both the charisma and compelling message for the organization to want to follow and recognize the benefits, both financial and environmental.

Few organizations today can articulate their sustainability vision. Lots of innocuous "feel good" statements exist on corporate web pages, but vision is lacking. And that's okay: we're new at this. But in 5 years we will go from a small handful with a vision to many hundreds with a vision. The organizations that have articulated visions and driven them into their organizations will have the influence to drive innovation that truly will transform their respective industries.

Rick Walker works on developing and supporting energy efficiency, sustainability and green building programs.