Moving in on the board: the lowdown on CSOs

Ben Cartland, an associate at recruitment agency Acre Resources, answers questions on the rise of a new beast in the CSR field: the chief sustainability officer

Why are chief sustainability officers appointed?
The position of CSO didn’t exist ten years ago as a recognized title, and this is reflective of the increasing importance of sustainability in the boardroom, to the point where it needs a dedicated representative.
Companies that appoint a CSO envisage that a substantial strategic and commercial advantage is achievable through their sustainability performance.
Generally those organizations that take on a CSO don’t want it to sit within a specialist function; the expectation is that it will be integrated into all the major areas of the business. We often hear from influential sustainability leaders that the most important factor is that their CEO is committed to tackling issues such as climate change and to changing their organization.

Where do they come from?
To date the majority of CSOs have been internal appointments and have arisen where the senior board members consider sustainability as an opportunity and a valuable part of corporate strategy. The CSO needs to initiate and embed the commercially relevant programmes at an operational level; as such it is essential they have the ability to quickly gain the respect and trust of the board. This is much easier where they’ve already had exposure to senior management/board members. The CSO’s purpose is to change manage, risk manage and identify and create revenue generating opportunities, whether through product or practice. When external appointments have been made, it has usually been a case of picking up someone who has been in a high-level sustainability role with a company in the same sector  – a case of looking for someone with proven implementation knowledge combined with credibility in the sustainability field. No matter where CSOs originate from, it will be their responsibility to drive sustainability as a core strategy throughout their company from the board down.

What are the key skills of a CSO?
Generally companies are looking for a combination of the following:
 Strategy: the CSO will be able to identify new markets and grasp opportunities relating to sustainability, as well as understand issues associated with corporate structures and the embedding of sustainability therein. He or she will also have to be innovative and nimble – with an ability to adapt to risk and opportunities at short notice, thereby ensuring the company takes the lead within its market.
 Profit and loss knowledge:
It’s essential that the CSO can express a vision in relation to profit and loss. Therefore, in all likelihood they will be well versed in areas such as return on investment, paybacks and cashflow analysis – and as such will work closely with the financial director.
 Policy: the CSO needs to be able to understand the direction that the board wishes to take.
People: he or she is likely to have good people skills. It’s crucial that CSOs can encourage and inspire those around them.
 Communications: the CSO must know how to communicate with stakeholders – in particular shareholders, customers and employees.

What are the activities and responsibilities of a CSO?
The CSO will be responsible for activities that will make a significant difference to shareholder value – such as potential new revenue streams and financing opportunities – as well as dealing with strategic questions. This will mean:
 Identifying new markets: the CSO will lead the move into new markets that are created by government policies.
 Looking at broad policy direction: the CSO will be expected to lead advocacy with policymakers and understand the direction and the opportunities/risks that will present themselves to their organization.
 Internal communications: constantly engaging peers in other functions of the company, it is essential that they are seen to be proactive in the delivery of a consistent message.
 Managing a team of sustainability specialists: he or she will have an overarching responsibility for the specific sustainability specialists at a group level – health and safety, environment, supply chain, compliance, reporting and so on.

How do you see the role evolving?
We expect the teams managed by CSOs will grow as they become more specialized; looking at the industry leaders at the moment, that trend has already begun. It’s also worth bearing in mind that the skill set of a CSO is similar to that of a CEO; the potential for a long career, going right to the top, is certainly possible. We expect those who have served as a CSO will also have opportunities to engage in non-executive directorships.

In summery the rise of the CSO is that of a broad business role with knowledge of sustainability being less important than core business skills and corporate/sector understanding, The appointment of a CSO is suitable for a companies that really want to embed sustainability into their core strategy.

On this basis we see the arrival of the CSO as a very positive move and expect to see more appointments throughout 2011.

For further information please contact Ben Cartland at ben@acre-resources.com