The opinions expressed right here by Trellis knowledgeable contributors are their very own, not these of Trellis.
It’s a conundrum that’s been round for the reason that earliest days of company ESG: If an organization desires to rent a chief sustainability officer, what’s the higher resolution? Discover somebody with robust data of the enterprise and profit-and-loss expertise? Or discover an knowledgeable and chief on ESG?
As detailed in our report for Trellis, Set Sustainability Technique in 2025, the reply is ideally to attempt to discover that uncommon snow leopard of a candidate who merges each profiles.
The sustainability background
Those that include a robust sustainability background have a tendency to search out themselves combating greater than ever for relevance, credibility and assist inside their companies. As one sustainability chief famous, “When you’ve got a sustainability background you’re focused as a tree hugger or attempting to make the corporate a nonprofit or seeming such as you lack objectivity.”
CSOs with an ESG background reported a scarcity of belief from the C-suite and board of administrators. They really feel much less like a real accomplice for the enterprise and extra like a cost-center reporting store, compliance perform and PR offshoot. Many of those CSOs lack confidence of their understanding of the enterprise, its technique and how you can handle organizational tradition and inside politics.
The EU’s Company Sustainability Reporting Directive (CSRD), despite the fact that it’s been watered down, has turn out to be a logo of a job these CSOs didn’t join: a compliance and reporting perform. They specific rising pessimism as to whether or not they can really combine sustainability in a manner that shapes enterprise selections.
In an more and more adversarial political local weather — coming from each Washington, D.C. and inside the company workplace — some CSOs lean into an ethical high-road method, believing those that don’t view sustainability priorities as on par with standard enterprise priorities are one way or the other much less moral or intellectually inferior.
“If an organization is benefitting from slave labor in its worth chain,” a head of sustainable investing just lately requested us, “Why is it my duty to make a enterprise case for why they should cease?”
The enterprise background
What CSOs with a robust enterprise and P&L background could lack in ESG data, they make up for with their understanding of how the enterprise operates and how you can navigate the C-suite and the group’s tradition. Their expertise and angle are nearly 180 levels completely different from CSOs with ESG backgrounds. They really feel optimistic about their capacity to advance an built-in, strategic method to sustainability. And when a brand new regulatory framework equivalent to CSRD arrives, they welcome it as a chance to leverage extra assist and sources for sustainability.
This may occasionally sound as if we’re recommending an organization ought to rent a CSO — and even a sustainability group members — with enterprise line expertise. However not so quick: Analysis suggests that CSOs with ESG expertise and experience obtain extra and encourage their corporations to make larger sustainability commitments and have a larger impression than these from the enterprise sector.
CSOs coming from enterprise usually lean in direction of making incremental progress. They stack a sequence of achievable victories collectively somewhat than setting daring targets, resolving problematic behaviors, reworking enterprise fashions or embracing holistic insurance policies. Moreover, CSOs from the company world typically lack relationships and expertise in coping with NGOs, advocates, communities, labor unions and policymakers. They typically want assist with exterior stakeholder administration.
Discovering a snow leopard
Too typically, corporations and their leaders overlook the substantial expertise and belongings that CSOs with robust ESG backgrounds deliver. First, they typically have extra consolation and an intuitive grasp of the necessity for sustainability stress administration. Many have come to grasp how you can align financial, environmental and social wants. They typically take into account views on when and how you can make tradeoffs when alignment isn’t reasonable.
Second, they keep robust relationships of belief with exterior stakeholders and have a deep understanding of their tradition. Additionally they comprehend the dynamics of the courtroom of public opinion and the way repute crises germinate. They’ll specific the corporate’s goal and values to influential networks of key stakeholders. Pushed by ardour, they typically refuse to settle or sacrifice. If their agency is contributing hurt to folks or planet, they are going to push, cajole and persuade their employer to form up and stay its acknowledged values.
Ideally, an organization ought to encourage their CSOs to meld the most effective of each worlds. CSOs with robust enterprise expertise can construct their sustainability stress administration capabilities and broaden their relationships with ESG stakeholders. CSOs with environmental and social experience can construct their data of how their agency’s enterprise mannequin works, what enterprise KPIs drive conduct and how you can make a enterprise case. They’ll study to talk within the P&L language.
What attractiveness like
CSOs who thrive push themselves to construct expertise and competencies drawn from every background. For instance, one tech firm led by a CSO with a robust ESG background has set a sustainability technique that features clear enterprise worth propositions and metrics tied to development and price discount. The CSO has created an inside steering committee of friends from related enterprise traces. Collectively they’re working to attach main ESG commitments round web zero, accountable sourcing, and waste and circularity to operational enterprise circumstances. They’re making a dashboard to trace each ESG and monetary efficiency metrics.
One CSO who got here from the finance workplace discovered that upon taking the CSO job, most individuals anticipated him to behave like a stereotypical CFO and reduce expensive ESG commitments. As a substitute, he had an epiphany. Information had all the time pushed selections for the finance group, which in flip pushed enterprise traces to more and more make data-driven selections. But, the corporate’s sustainability report, with all its information, was used primarily for exterior communications and disclosure necessities. The CSO realized the corporate wanted to get real-time, actionable ESG information within the arms of enterprise line leaders month-to-month. Displaying who was main and lagging grew to become a strong engine to drive steady enchancment.
We’ve additionally seen corporations create a two-headed governance method. In a single case, a CSO who got here from a enterprise line drives the strategic integration of sustainability, whereas one other senior-level vice chairman, leads the corporate’s ESG efforts, reporting and compliance. Collectively, they work to advance outcomes for folks, planet and revenue from completely different angles.
Employers and leaders are sometimes drawn to simplifying decisions into black-and-white, either-or selections. Both sustainability is a compliance price middle or it’s a strategic driver of enterprise success. Probably the most important lesson for CSOs and those that rent them is to make sure that they don’t fall into this lure. It’s important to handle tensions and priorities to find out when revenue should take priority, when folks and planet should take priority and after they can align and transfer ahead collectively.
