With the increasing international emphasis on sustainable development and goals in the recent years, more and more organizations have declared their net-zero commitments and even establishing high-level management positions, including Chief Sustainability Officer (CSO), Director of Sustainable Development, and Sustainable Development Manager.

The establishment of these management roles certainly represents a change in organizational accountability. However, such actions only have internal and external symbolic significances. Their job responsibilities, resource allocation, performance measurement, management authority, and responsibility all remain unclear. Therefore, this organizational governance change has also been criticized and questioned: What are the responsibilities of these relatively new job roles? What kind of positive changes have actually been created? How should the impact of this new positions be measured?

When an organization releases a sustainability report or discloses related information, I am particularly interested in three questions:

1. Who is responsible for discussing the organization’s operational impacts and negotiation with stakeholders?
2. What are the positive and negative impacts of the organization’s policies, products, services, value chains, etc. on society and the environment?
3. How should sustainability-related indicators be combined with work performance evaluation and measurement?

For some organizations, there are definitive answers to these questions. But for most of the others, the answers are probably “still planning” or “not clear yet.”

In the survey published by Weinreb Group, international talent recruitment consulting company, the “Who” question can be answered. The report pointed out that since 2011, the number of Chief Sustainability Officers (CSO) in the world’s top 500 organizations has increased by more than 228%. Although this shows that governance level and importance of sustainability issues have risen rapidly compared to the past, it has also prompted another emerging management issue: is the act of establishing CSO’s a common way for organizations to meet social and stakeholder expectations through its symbolic position or has it indeed promoted substantial transformation and change in organizations?

Fragmented positioning has slowed down sustainable transformation.

As sustainability issues become more widely discussed, the stakeholders that CSO’s need to respond to are more diverse. According to reports, in 2021, the total number of newly positioned CSO’s globally has exceeded the accumulated number of CSO’s established in the past five years. Compared with other C-Level positions, the CSO position is quite difficult to imagine 20 years ago. Thus the position lacks reference information or trajectory for and is common to encounter the following dilemmas.

1. R&R Overlapping: unclear roles and responsibilities, and many overlapping duties and job scopes
2. Vague Direction: undecided importance of sustainable issue management and unclear strategic direction and goals
3. Fatigue of “Sustainability”: “sustainability” overused in multiple job positions and descriptions, leading to resource dispersion and audience fatigue

Although unclear function and positioning of CSO’s give organizations greater flexibility to define and describe, it can also easily promote internal competition, resulting in large amounts of duplicate work and transformation efficiency reduction. On the other hand, despite CSO’s being a highly discussed position today, only 35% of them report directly to the Chief Executive Officer (CEO) or discuss specific issues with corresponding Officers, capital market related issues with the Chief Finance Officer (CFO) and operational issues with the Chief Operating Officer (COO). Other common sustainability management practices include decentralizing environmental, social, and governance issues to two to three departments and establishing a sustainability committee for management.

In response to the stages of sustainability development, organizations manage and have emphasis on sustainability issues differently; their scope of work is also very different. Therefore, from the initial vague positioning of sustainable management personnel, to the midterm internal communication and integration restrictions, to the difficulty of performance evaluation in the end, organizational development acceleration and transformation has become more challenging.

Evaluate Organizational Appropriateness: CSO may not be the most Suitable!

Many aspects need to be considered when establishing a new position in an organization, including staffing, purpose and function, evaluation, and compensation, etc. Thus, it is recommended for organizations to assess their current sustainable development and transformation stage and also take the size of the organization and future market development into consideration. If it is necessary to establish a sustainability director position to promote the company’s sustainable process after evaluation, then the following three suggestions can be used as reference.

Suggestion 1: Think beyond ESG (Environment, Social, Corporate Governance)

To avoid constraints and underestimating the impact and scope, it is important to broaden aspects when planning a sustainable blueprint or action plan; do not focus specifically on only one of the ESGs. For example, when giving professional advice on carbon reduction projects, in addition to explaining the influences of developing new technologies and carbon reduction actions, emphasis is also placed on the importance of aligning the project with local community residents to enhance colleagues’ participation and community inclusiveness. When the project design perspective has been expanded, inventory for necessary resources, communication target audience, and impact assessments will be easier to accomplish.

Suggestion 2: Define the Phases of Growth

The first step towards organizational growth is planning short, medium, and long-term goals. But to optimize all the items simultaneously is quite difficult and actually impractical in organization operations execution. Therefore, the optimization items need to be categorized:

1. Level 1 - Quick Fix: Items that can be immediately be resolved and directly optimized.
2. Level 2 - Urgent and long-term: Items that are urgent and can be handled after communication in the short term, but also require continuous follow-up.
3. Level 3 - Monitoring and sustainability projects: Sustainable strategies that are dynamically adjusted according to the medium- and long-term period in response to changes in the market and organizational development direction.

Suggestion 3: Building Organizational Capabilities

Sustainability consist of a wide range of issues. On top of individual professional skills, the establishment of an accountable, open, and inclusive organizational culture is equally important. As cross-departmental cooperation has become the norm, it is suggested that organizations actively create a diverse, open, and inclusive environment to promote creative solutions. At the same time, to effectively anchor and push for organizational transformation, individuals must have the ability to identify problems, key points and execution gaps, and define problems through appropriate measures.

Like DNA, sustainability will eventually be integrated into the organization and become a part of each department’s area of work. And “when sustainability development becomes a part of everyone’s daily life, it will no longer be the job of a single individual.” For this to come true, organizations still need a sustainability leader to properly allocate and manage respective issues into the overall scope of work. Regardless of who the organization ultimately appoints, the most important and ultimate goal is to tailor a suitable sustainability transformation plan for the organization, creating and developing business opportunities in future new markets through this mechanism.

 

Sub-editing: SC. (Tracy) Ni/senior editor

 

Source: CSRone
Photo credit to: Christina @ wocintechchat.com