In 2015, UN Member States committed to adopting the 17 Sustainable Development Goals (SDGs), a universal plan of action for the period 2015-2030 aimed at ensuring a prosperous future globally. The SDGs have a long-term vision that generates a positive social, environmental and economic impact to ensure the quality of life and fundamental rights of people, and the economic sustainability of territories.
Since the introduction of the 2030 Agenda, there has been a major shift in the approach to business’ engagement with society. By broadening the responsibility that companies have towards their environment, they are required to take a much more active role in its protection, their commitment goes far beyond a declaration of intentions and an exercise of solidarity that is entirely tangential to the business. Sustainability is now a priority for organisations, and managing it properly is becoming a strategic part of the business itself. Responding to the new needs of companies has led to the creation of a new executive function: the Chief Sustainability Officer or CSO.
Role, functions and skills of the CSO
Both the role and the title of the CSO have not been fully standardised: they vary from company to company and are frequently readjusted. Ideally, the Sustainability department should be integrated into all business areas, and its manager should report directly to General Management, maintaining a permanent connection with all areas as well as a close collaboration with Marketing or Communication management. Currently, only one third of CSOs report directly to the CEO, which shows that sustainability is not yet an integral part of corporate strategy and decision-making in many companies. Not giving sufficient authority to the CSO translates into a loss of potential considering that this profile will soon become one of the most important executive positions.
The CSO’s principal role is to develop a corporate sustainability strategy, identify the organisation’s sustainability risks and opportunities, and raise awareness among teams of the importance of committing to this outreach objective, in order to shape a sustainable business model capable of generating value for its stakeholders (investors, employees, suppliers, customers, etc.). As Johanna Gallo points out:
“The functions of the CSO should therefore include: linking the organisation to the SDGs and identifying its objectives, measuring the impact achieved with its measures and actions, assessing the environmental risks derived from its activity, managing social issues related to the teams, deciding on investments with ESG criteria (environmental, social and governance) to be made, and preparing reports on results as well as their subsequent disclosure to its stakeholders and to society as a whole”.
Johanna Gallo, co-founder and CEO of APlanet.
Source: Observatorio RH
To perform this function correctly, those occupying this new managerial position will need to have technical skills for data management and analysis, a deep knowledge of the sector, its key concepts and its legislative framework. In addition, they will need to have communication and leadership skills on top of a strategic business vision, to be able to demonstrate how sustainability initiatives are generating value for the business.
Challenges and opportunities for the CSO
Key challenges
The main challenges for the CSO include being involved at the heart of the business, actively influencing the direction the company should take; integrating ESG criteria transversally throughout the organisation, designing a strategy to achieve this, defining roles and structures and establishing accountability systems; and addressing sustainability as an opportunity, for which it is essential to address the recruitment, engagement and retention of the right talent to achieve this.
Likewise, they must understand that digital transformation is a driver for achieving sustainability goals. Technology is a key tool for the automated capture of large amounts of data for analysis, measurement, auditing and reporting, and therefore a key ally for any sustainability manager. One of the great challenges for CSO is managing ESG data.
Rodrigo Pérez, Risk Advisory Partner at Deloitte, warns of the need to include this data to decarbonise the activity of companies:
“Data will play a fundamental role in the achievement of a net-zero future and in the challenges facing the CSO, the main challenge being the lack of data,” says the Deloitte partner. “Not having complete and quality datasets hinders their ability to clearly define the sustainability strategy, communicate results to stakeholders, as well as to have a competitive offer of products and services, the optimal management of risks, or to comply with regulatory requirements, that is to say, it affects all the goals of the green transition”
Source: Compromiso RSE
CSO opportunities
Today, most large companies are interested in having a manager with these characteristics, but it is not an easy job to find, and those that exist, even at the lower end, are highly sought after. Firstly, because it is a relatively new sector, and secondly, because the profession is becoming more ‘technical’, due to the constant barrage of regulatory changes on ESG issues, and there is a tendency to leave behind the generalist vision of the position to look for more specialised talent in one of the three core areas of environment, social and governance.
In terms of salary range, we are talking about a senior professional who can earn, on average, around €55,000 gross per year, according to the ‘II Study of the DIRSE function in Spanish companies’, prepared by DIRSE.
Undoubtedly, sustainability has become a fully fledged and central focus for businesses that will likely offer significant employment opportunities in the coming years, although it will increasingly require more training, specialisation and continuous learning on the job.
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