Four reasons for the rise of the CSO

The CSO — chief sustainability officer — is in. But maybe the role is changing too. The role of the CSO seems to be less about being an expert on climate change science and more about communication. As this report from Korn Ferry states: “CSOs are also perceived as the ‘Chief Translation Officer’.”  On a similar theme, the FT cited Rachael De Renzy Channer, responsible for sustainability at Egon Zehnder, saying: “The ability to operate at the C-suite, to have those conversations with the CFO about reporting,” matters more than “deep climate expertise.”  

What we can say for sure is that the role is more important than it used to be. 

PwC researched 1,640 public companies and found that just under a third had a CSO. Perhaps more tellingly, more CSOs were appointed in 2020/21 than in the previous eight years put together.  According to a report from Weinreb Group, a recruitment firm specialising in this area, demand for CSOs increased 228 per cent over the last ten years. 

But this all begs the question, why?

The rise of the CSO is not down to some populist craze as some might suggest; instead, deep forces are at play — making the CSO role vital for a business wanting to flourish in the 2020s.

Climate change

We have known about climate change and what it means for years and years, but until recently, it felt theoretical. It is human nature that for as long as a threat is theoretical, no matter how strong the theory, it feels distant, something for discussion rather than action.

But this is no longer the case. Heat waves worldwide, bringing with them record temperatures, have made climate change seem more real. Likewise, climate fires have added to this sense of reality. And human nature being what it is, we take it more seriously when something jumps from the theoretical to a real thing happening now.

Will people turn on businesses that don’t take climate change seriously? As heat waves lead to fires and worsening crops increase food costs and rising water levels lead to more floods, we will inevitably see a public backlash. 

Climate change deniers will be held as figures of public contempt, and companies that were seen to support them will lose the confidence of their customers and probably their workforce.

The need for net zero and green policies has become impossible to ignore — there is only one excuse for not having a CSO.  The excuse is that sustainability principles are so ingrained into senior management that there is no need for one.

Covid

The Covid crisis has been linked to a change in attitudes. Lockdowns led to a reassessment of values — and millions of people looked back on their life pre-Covid and questioned their priorities.

The Covid pandemic has led to a new way of thinking about work, and this new way has probably been associated with what they call the ‘great resignation.’

Covid and the subsequent Ukraine crisis have highlighted another issue with how business used to be done.  The supply chain is creaking, and flaws in the old just-in-time system have been exposed. Instead, an awareness of the importance of anti-fragile, resilient supply chains with redundancy has become clear. This, in turn, has turned attention to the importance of more local suppliers and sustainable practices (reducing reliance on distant suppliers). 

Oliver Chapman, CEO of supply chain specialist OCI said, “For too long, the supply chain operation has been taken for granted and ran on the assumption everything would go just right, with every interweaving part of the supply chain fitting just right, all the time. Now we are paying the price for such complacency.”

But there is a deeper force at play. Before Covid, there was already a growing sense, especially amongst millennials, that there was a desire for greater meaning from work. Covid and the Ukraine crisis have accelerated that trend. 

Remote working

Remote and hybrid working have brought with them an emphasis on finding social policies that can bring out the best in staff who operate at a distance.

There are advantages and disadvantages of remote working. Among the disadvantages are questions relating to staff isolation, with a potential negative impact on their health, and the potential negative impact of loyalty to a company. 

By focusing on social policies, many of these problems can either be overcome or reduced. 

Demographics

But there is a deeper force at play. This force is demographics.

The baby boomer generation is retiring. The oldest members of this cohort are in their mid to late 70s. However, even the very youngest of the baby boomers will soon be 60. 

The retirement of Generation X will follow.

The ageing of the baby boomers and Generation X to be replaced by millennials is one of the biggest demographic shocks in history. Never before will the ratio of retired to working population be so high. As a result, too few people will be available to fulfil the roles that the economy and society demand.

Only automation and, in the shorter term, immigration can reduce the impact.

The shift in the labour market will force companies to adopt more policies designed to create a more positive working environment for staff. 

The social aspect of the CSO role, the S in ESG, will become more important.

When will CSOs become CEOs?

The shift in the importance of the CSO leaves one question.

When will CSOs be promoted to CEO?