Are Chief Sustainability Officers on their Way Out?

by | Feb 9, 2012

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Some businesses are rejecting the chief sustainability officer model, in the fear that such a position prevents sustainability getting embedded throughout the company’s operations, according to a white paper from Accenture.

The Chief Executive Officer’s Perspective (pdf), the first in Accenture’s Lessons from Leaders series, says that the CSO has risen significantly in prominence since 2004, when the first such position was created in the U.S. The key advantage of having such a position is that it clearly demonstrates sustainability’s importance to the organization, Accenture says.

But if such a position is to succeed, CEOs must ensure the sustainability function has enough clout to influence others. There is a danger that other units will assume that sustainability is “now someone else’s problem,” the paper said.

Given this challenge, some say that the CSO position is already being phased out.

GE is one company where, as an alternative, the CEO decentralizes sustainability across the management team, through ad-hoc incentives. GE France president and CEO Clara Gaymard says the company appoints leaders to run specific initiatives, such as its Ecomagination campaign. Otherwise, responsibility for sustainability is spread out across its leadership team.

At Accenture, an environmental steering group makes strategic recommendations on sustainability goals. Leadership then approves these recommendations, and CEO Pierre Nanterme delegates the company’s key sustainability objectives across its top leadership.

The white paper said there is no right or wrong way to assign responsibility for environmental goals and initiatives. The choice depends instead on the organization’s culture and how far along it is in adopting sustainability.

The white paper also said that to pursue sustainability, CEOs must strike a balance between short- and long-term considerations. They should consider whether volatility in stock markets actually provides an opportunity to take a longer-term view, instead of reacting to short-term pressures.

For example, some organizations are switching to publishing only half-year financial results – along with ongoing updates – so they appeal more to investors who care about long-term prospects. It’s unclear how this strategy will pan out over time and how investors will adapt, Accenture says.

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