Only 12% of Major Firms have Executive Team for Sustainability

August 27, 2009

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Many large corporations are merely paying lip service to their environmental policies, according to a new report from the Sustainable Enterprise Institute.

Among companies in the Russell 1000 Index, only 125 have an executive level committee with responsibility for corporate social responsibility or environmental, health and safety oversight, according to “The Road Not Yet Taken” report (PDF).

Only 54 of the firms, or just above 5 percent, have a “C” level executive responsible for such oversight.

About 60 percent of the firms have company-wide environmental policies, although very few of those firms have formalized documents on the topic. Instead, most firms address CSR or EHS in a CSR report or language on the company Web site, with many of them “not particularly substantive” according to the report.

This table shows the extent to which corporate environmental policies adhere to industry-standard definitions of sustainability.

To completely and adequately address environmental concerns, the Sustainable Business Index suggests that firms’ policies have these six elements:

Board of directors has responsibility for the environmental policy.
Policy specifically applies to all company operations.
Policy includes commitments to quantifiable goals or targets.
A commitment to public reporting.
Policy addresses pollutant emissions.
Policy addresses conservation of energy and/or water.

Only 40 percent of the firms in the Russell 1000 Index have at least one of the above aspects. Only eight firms have all six elements in their policy. Here’s a table illustrating firms’ commitment levels.

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Reader Comments

As an executive recruiter specializing in this arena, I find that this is not really surprising at all. And the situation will only continue in this direction unless companies strategically address it at the most senior levels of management.

With each passing day, recruiting and retaining the right executive talent to lead Lean & Six Sigma efforts and Green & Sustainability initiatives poses a greater challenge.

Today’s most experienced Lean leaders hail from those industrial sectors which were pioneers in continuous improvement. As still greater numbers of companies venture into lean and Six Sigma, the demand for this expertise is beginning to outweigh overall supply. So where and how do we seek out the best of these individuals?

On the other hand, the challenge in recruiting the right Green and Sustainability leaders is different, but no less daunting. Can we even agree about what makes an executive Green? How do we deal with imprecise definitions and varying skill sets? How can we focus on targets which are moving due to the evolving nature of executive backgrounds?

In both situations you’re hiring change agents, quite often the executives who will outline a new vision for your company, and then inspire your team to make that vision a reality. So what does it take to recruit the right Lean & Green executives for your organization?

I believe that the following are critical factors:

•Understanding the key principles and goals underlying lean, Six Sigma and green and why these are important to business success.
•Knowing how to identify and differentiate among the various stages through which companies ascend on both their lean and green journeys.
•Figuring out where your own organization currently stands on these two ladders.
•Identifying the critical characteristics among the lean and green leaders who really stand out from the crowd-the qualities they bring to the table to deliver impact for their companies, and
•Following key strategies so you can attract and retain the best-in-class Lean and Green Leaders.

Adam Zak

Adam Zak | September 17th, 2009

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