Why your sustainability leader must sit at your top table – by Mary Francia

Congratulations, you’ve just hired a senior sustainability expert.

Your company is excited to show that you’re taking sustainability seriously. But if your new hire is reporting to the head of CSR, marketing, or comms – which is fairly common – you’re making a mistake.

Your sustainability lead should report directly to the CEO and sit at the top table.

Why?

Because sustainability is, nowadays, a strategic issue for your company, directly tied to your revenue, so it must be dealt with at the highest level.

As a society, our expectations from business are changing. We no longer reward companies that are driven by growth and profit for their own sake. Consumers are interested in businesses that are heavily invested in human wellbeing and a sustainable ecosystem.

Increasingly, consumers investigate your green credentials before buying your products. Investors do the same before putting money into your company.

And in the EU, for example, large companies are encouraged to disclose their policies around environmental protection.

This may soon become a legal obligation. The European Parliament has recently recommended[1] transitioning to a mandatory due-diligence model, where companies will be legally made to account for their impact on the environment, both in their own operations and in their supply chain. It will apply to large businesses, publicly-listed companies, and certain SMEs operating in the EU.

As a result of these trends, you cannot pay lip service to sustainability.  Your sustainability leader must do far more than produce reports on your environmental impact. It is not enough to give them a vague mandate, and we cannot just promise a net-zero carbon for 2050. They must become your partners in rethinking every aspect of your business through a green lens – no less.

Which of the UN’s 17 Sustainable Development Goals apply to you? These include climate action, affordable and clean energy, responsible consumption and production, and more. Develop a full understanding of your company’s sustainability dashboard and understand your impact in these categories.

You need to be extremely open, business-conscious, and transparent in the current climate, and you must be similarly conscientious about the green credentials of your supply chain – both ways.

Then use this knowledge to define and design the way you produce your products so they are sustainable, innovative, and leverage opportunities in this evolving environment.

The companies that do this best turn sustainability into a core part of their purpose and appeal, changing the way they are set up and operate.

For example, Unilever established a blueprint to move itself to “greener” growth, including moving to a completely renewable energy supply, reducing its plastic waste and water use, and achieving a supply chain free of deforestation by 2023. The consumer goods multinational is now known for its environmental credentials.

Becoming a strong voice with knowledge of your industry, responsible not only for monitoring but enacting and managing sustainability efforts, is a competitive strategic move.

 

But a transformational move like that cannot be engineered by mid-level management.

 

The former Unilever CEO Paul Polman was behind its drive to reduce its carbon footprint.

So make space for your own Chief Sustainability Officer and engage the board to learn how to integrate sustainability in your company guidance; Your company’s future may depend on it.

 

[1] https://www.weforum.org/agenda/2021/10/european-union-sustainable-corporate-governance/