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What’s so important about a Chief Sustainability Officer?

By Kate McClaskey

As companies are growing to understand the importance of corporate social responsibility, an increase in high-level CSR jobs has taken place. More than ever, companies are creating VPs and Directors of CSR or Sustainability, a role unheard of a few years ago. According to Ellen Weinreb of Greenbiz.com and a CSR recruiter, before 2006, such jobs never held much power, but now, as CSR has become an integrated part of corporate strategy, there is an increased “importance of positions overseeing CSR.”

But just because a company has a vast number of people with roles in environmental and sustainable positions, it doesn’t mean they are allocating the correct amount of CSR attention, dollars, and effort in the right areas.

That’s where the Chief Sustainability Officer comes in.

Not many companies have roles specifically entitled “CSO.” Rather, most are simply the highest-ranking person in charge of CSR. But for those that do, the CSO oversees the environmental health and safety of the company, maintain regulatory affairs, are responsible for human rights and workforce diversity as well as a variety of other duties. By definition a CSO “sits amongst the top leaders of the company to make key strategic decisions and oversees the SEC filing that identifies the corporation’s accountability to shareholders.“

A new report by Deloitte [PDF] which surveyed 48 executives who oversaw sustainability efforts at their companies, finds that there is a “clear gap between their leaders’ aspirations with regard to sustainability and the way that sustainability is enabled within their organizations.” What the company expects and what is actually happening are different. That’s why a chief executive in charge of sustainability is critical.

A 2008 study by Hudson Gain Corporation [PDF] found that companies with a CSO have a clear advantage over those that do not, because sustainability initiatives have short-term cost savings that induce long-term efficiencies. However, the study also found that there is a pattern of “simply handing off the sustainability responsibilities to an existing employee whose main credentials are [having] an interest in sustainability and a strong reputation in the company.” This can create mixed results because of the risk of placing people into the position without much experience to get the job done right.

But several companies have taken the initiative and gone after sustainability head-on. They have been among the first companies to create CSO positions and will hopefully lead the way for more companies to do the same.

Charlene Lake of AT&T

Lake was appointed the as Senior Vice President of public affairs and Chief Sustainability Officer in 2009, the first in the company’s history. She is responsible for leading their philanthropic and volunteerism programs as well as coordinating initiatives that connect social needs with AT&T’s business objectives. AT&T CEO Randall Stephenson emphasized that the “appointment of a chief sustainability officer reflects [AT&T’s] commitment to our long-term future and the communities where we live and work.”

By creating a position devoted only to sustainability, AT&T is hoping to move beyond a cookie cutter philanthropy approach to a more seriously sustainable company.

Linda Fischer of DuPont

The Vice President of DuPont Safety, Health and Environment and Chief Sustainability Officer, Fisher is responsible for advancing DuPont’s progress towards sustainable growth, its health and environment programs, as well its regulatory affairs.

In a recent interview with Fortune, Fischer explained how her role has changed from simply keeping operations in compliance to reduce the company’s carbon footprint but to “finding market opportunities that are going to present themselves because of evolving societal needs.”

She emphasizes that companies must stay ahead of the curve as their customers are demanding greener and more energy-efficient products. And as to the concerns that with this evolution the role of CSO will disappear she responds, “Ultimately, if companies have completely ingrained sustainability into their strategy, you could say you probably don’t need a chief sustainability officer. But sustainability is a constantly evolving concept.” In 10 years there will be a new wave of sustainability, she says. And in that future, there is an area which will need a chief sustainability officer.

Barbara Kux of Siemens

When Kux joined the Managing Board of Siemens in 2008, she was the first woman appointed to the company’s governing body in its 160 year history. She was also named the sixth most powerful international woman in business by Fortune in 2009.

Currently, she manages one of the highest grossing companies in Europe which also boasts that a quarter of its revenues, $27 billion, come from green technologies. Combining all of Siemens’ supply chains, which are generally decentralized and numbering around 110,000, into a central organization is Kux’s main goal. At a press conference last year, Kux vowed “to establish the world’s leading procurement network, push the development of technologies, and accelerate innovation cycles.”

In a recent interview with SupplyManagment.com she explained that by reducing the number of Siemens’ suppliers “means not only improved efficiency and lower administrative costs, but also greater innovative strength.” She views her role on the company’s board as one of opportunity. “As a member of the managing board, I’m responsible not only for supply chain management but also for green technologies and sustainability. In this capacity, it’s my responsibility to help our customers to protect the environment while promoting growth.”

Important Connection with the CEO

It’s important not to overlook the special connection between the CEO and CSO. As a recent article in the New York Times emphasizes, the importance of CSOs is that they report directly to the CEOs of companies, therefore ensuring they have influence over the business. In fact, Coca-Cola‘s CEO takes this connection a step farther. Coca-Cola’s CEO Muhtar Kent says “I have not appointed another one [CSO] and never will. That’s me.” Kent emphasizes that the role of overseeing the company’s sustainability is his responsibility because it starts from the top. From there, he says, it permeates through the entire organization.

Kent feels that sustainability is about values and about how the company thinks. “What will make us very successful in the next 10 years is our entire set of values, how we think of business from an accountability perspective, from an integrity perspective, how we think of the planet in terms not just of getting our house in order but of how we look at the street, and how we look at the role we play in making our city and our country and our world a better place.”

Kent’s thinking says something about sustainability. It’s growing in importance and it’s here to stay. As Frank O’Brien-Bernini, Owens Corning’s CSO says, “…few big companies operate without a CEO, COO (chief operating officer) and CFO (chief financial officer). Many have CMOs (chief marketing officer). When they are joined in the C-Suite by the CSO, we’ll know that sustainability has finally become integral to the core of business.”

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