The Evolving Role of Chief Sustainability Officers

They once focused on optics and reputation. Today many are interacting with investors and helping set strategy.

by

Robert G. Eccles

and

Alison Taylor

by

Robert G. Eccles

and

Alison Taylor

From the Magazine (July–August 2023) · Long read

Tom Nagy/Gallery Stock

Summary.

The role of the CSO is undergoing a rapid and dramatic transformation. Historically CSOs have acted like stealth PR executives—their primary task was to tell an appealing story about corporate sustainability initiatives to the company’s many stakeholders. Now, however, some CSOs have moved away from a role centered on messaging and instead are spearheading the true integration of material ESG (environmental, social, and governance) issues into corporate strategy. This pivotal change requires close collaboration with other members of the senior leadership team and active engagement with investors.

This article argues for four major changes to the CSO role. The CSO should be involved in strategy and capital allocation; be more focused on and realistic about stakeholder interactions; be more fully engaged with investors; and be supported with sufficient resources and expertise throughout the entire organization, including on the board and senior leadership team.

In an ideal world, the authors say, a stand-alone CSO role would become obsolete once companies fully integrate ESG considerations into their corporate strategy and operations. Until that day arrives, however, it is crucial to adapt and evolve the CSO role.

Idea in Brief

The Problem

The chief sustainability officer (CSO) role has historically been centered on stakeholder management and PR messaging with little involvement in shaping corporate strategy.

The Opportunity

CSOs can be more impactful if they focus instead on integrating material ESG issues into corporate strategy, engaging with investors, and collaborating with senior leadership.

The Advice

Change the CSO role in four ways: Involve them in strategy and capital allocation, streamline their stakeholder interactions, engage them more fully with investors, and support them with adequate resources and expertise.

The role of the chief sustainability officer is undergoing a rapid and dramatic transformation. Historically CSOs have acted like stealth PR executives—their primary task was to tell an appealing story about corporate sustainability initiatives to the company’s many stakeholders, and their implicit goal was to deflect reputational risk. The role had virtually no involvement in setting company strategy or communicating it to shareholders; those responsibilities fell to the CEO, the CFO, and the head of investor relations.

A version of this article appeared in the July–August 2023 issue of Harvard Business Review.

Robert G. Eccles is a visiting professor of management practice at Saïd Business School, Oxford University, and the founding chairman of the Sustainability Accounting Standards Board.
AT

Alison Taylor is a clinical associate professor at New York University’s Stern School of Business and the executive director of Ethical Systems, where her research focuses on ethics and business responsibility.

The Evolving Role of Chief Sustainability Officers

Idea in Brief

The Problem

The Opportunity

The Advice

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