Organization charts normally have boxes for lots of chiefs – whether it’s chief executive officer (CEO), chief financial officer (CFO), chief operating officer (COO), or even chief technology officer (CTO) – to indicate positions of senior responsibility for large areas the organizations’ day-to-day and strategic operations. However, organizations that are making an explicit commitment to more sustainable business practices have not yet granted the same seniority to the person in charge of those sustainability initiatives. There are a growing number of chief sustainability officers (CSOs) out there – DuPont appointed Linda Fisher as CSO as far back as 2004 – but for many organizations, sustainability is seen as being part of other strategic responsibilities such as compliance or environmental health and safety, corporate affairs, marketing, community relations, which precludes the creation of an entirely separate division.
Greenwashing
As we have discussed in other blog posts, greenwashing is the practice of using advertising and PR messages to promote a commitment to sustainability that has no real evidence in operational practice. Companies say all the right things but make no significant changes to their business practices to support those commitments. On that basis, many companies see no need to support sustainability initiatives with a formal organizational structure or operational metrics. The compliance department can make sure that the company isn’t breaking any rules, and marketing can make sure that we are promoting all of our good community efforts in the name of sustainability and corporate social responsibility (CSR). However, sustainability and CSR is about exceeding what is required by law and going beyond ordinary compliance.
Changing Expectations
Customers, partners and investors are no longer willing to settle for PR messages and advertising slogans. They now expect to see firm commitments, disclosures and sustainability reports as to how the company is meeting those commitments. It may make sense for your supply chain manager to monitor better use of recyclable packaging, and for your operations manager to monitor energy and water usage, but these are internal procedures and do not cover the full spectrum of sustainability topics, like social value created, investment in local community or stakeholder engagement. If your company plans to incorporate sustainable business practices as a core value, it should also embrace the accountability of a public commitment to that value.
A Strategic Approach
Of course, putting a CSO in place in a small organization may see like you’re trying to run before you can walk, but there is a clear path to follow. Compliance is a great place to start. Actively promoting the fact that you devote time and resources to maintaining compliance with any and all regulations can be a good first step on your path to sustainability. This compliance will involve all departments that are subject to such regulations. In that sense, sustainability acts as a risk management mechanism. The next step will be to move beyond basic compliance into cost efficiency in order to realize financial savings while incorporating greater sustainability. Moving to wind or solar power to reduce carbon emissions would be a good example here. This will enable brand differentiation and identification of business opportunities. To gain a strategic advantage though, would involve a formal transition to sustainability as a core value. Products and services that you offer to your customers need to truly reflect your commitment. This typically involves innovation as you start to redesign existing products, services, management and engagement methodologies in addition to expanding your offerings. At this point, you may be ready to post that CSO vacancy!