It is a role virtually unheard of 20 years ago. But today, chief sustainability officers (CSOs) across the world are among the most influential corporate decision makers, especially those in businesses with a large environmental and social footprint on the environment.
The role can be tricky to define, as the concept of corporate sustainability has evolved in recent years. But the consensus is that the CSO’s job is to integrate environmental, social and governance issues — also known as 'ESG' — with business decisions, processes, and culture.
In Asia, the role is somewhat less established than it is in the United States and Europe, where agitating shareholders, civic society groups and consumers have applied pressure on companies to lighten their ecological footprints since the early 2000s. But even in this region, corporates are starting to see the benefits of sustainability, as the business case become clearer.
Most companies, say Harvard Business School researchers, typically engage with sustainability because of compliance, for instance, as a response to new environmental regulations that affect the business or its suppliers. It then typically evolves into a more strategic approach to find ways to increase efficiencies and, ideally, boost the bottom line.
The most prevalent incarnation of sustainability in Asia has been corporate social responsibility (CSR), a popular practice rooted in charitable donations and one-off community projects as companies wanted to be viewed as 'giving back to society'.
We need to demonstrate that a company can be sustainable and financially successful. You don’t need to trade one for the other.”
Michael Kobori, vice president, sustainability, Levi Strauss & Co.
The reality today in Asia is that sustainability still tends to be pigeonholed as a reporting function—the guys who write sustainability reports then tell the market how well they’re doing, often without a third party to gauge their real performance.
“Sustainability reporting should be just one cog in the wheel rather than 90 per cent of your job,” says Thomas Milburn, director at sustainability consultancy Corporate Citizenship. “In Asia, there’s been a push for reporting and accountability. But the emphasis should be on the thinking rather than the doing—to set the strategy and be a centre of excellence for the rest of the business,” he tells Eco-Business.
"CSOs can’t afford to sit in a corner, write a sustainability report, issue a green bond, win some awards, then tell the market the company is a sustainability pioneer. If you’re not changing the core business, then you are not doing your job."
The job has evolved significantly over the last few years, and is different from one company to another, so there is no real template from which a growing number of people graduating with sustainability degrees—still a new qualification in Europe, let alone Asia—can learn.
What does a CSO do?
1. Clearly and continuously communicate the importance of sustainability to management.
2. Ensure sustainability is integrated with core corporate strategy, and other functions to focus on setting detailed goals and targets.
3. Measure progress through key performance indicators.
4. Ensure subject matter experts work together to support every department and share knowledge.
5. Communicate sustainability commitments and progress with stakeholders.
Some sustainability heads, such as Beatriz Perez of Coca-Cola, which last year earned the ignominious accolade of the world’s biggest plastic polluter, sit in the communications department. So, their job is essentially telling the world about the good their firm is doing. 
Others, such as Andrew Buay of Singtel, one of Asia’s largest telecommunications companies and among the few firms in Singapore that take responsibility for electronic waste recycling, sit in human resources. So, their job is about aligning the workforce around their company’s sustainability ambitions.
Some, like DBS Bank’s Mikkel Larsen, report to the chief financial officer. So, their role is about making sure there is a business case for sustainability that helps, not hurts, the bottom line.
Then, there are those who report directly to the boss of the company, although this is rare in Asia.
Among them is Dr Steve Newman, the group sustainability director of Banyan Tree Hotels & Resorts, who reports directly to Claire Chiang, the Asian luxury hotel brand’s co-founder and senior vice-president who also chairs the company’s sustainability arm, Banyan Tree Global Foundation.
Banyan Tree is one of Asia’s few hospitality brands with a strong environmental sustainability track record, although it is also developing a resort on top of one of Singapore’s dwindling patches of rainforest.
“Distance from power devalues sustainability,” says Newman, who has a PhD in marine ecology. “In our case, because of direct reporting, open and accessible communication [with Claire Chiang], the power distance is short.”
Sustainability is not a department. It's a mindset.
Dr Steve Newman, group sustainability director, Banyan Tree Hotels & Resorts
If sustainability executives are to wield serious impact, a seat at the management table is critical, says Gwyneth Fries, the Singapore-based senior manager for sustainability at global logistics firm Agility.
“The best way for sustainability officers to achieve impact is to have board level representation. If you don’t have that, you can still get a lot done. But you won’t see the degree of shift that can be transformational for a business,” she says.
The reality is, sustainability is only just starting to gather momentum in Asian business circles. As ESG factors appear on the radar of the investment community, listed companies are increasingly obliged to write sustainability reports, and consumers are becoming more discerning about the story behind the brands they buy.
As the pressure builds on companies to craft a credible sustainability story, so the question of what makes a great sustainability officer becomes more important.
Eco-Business asked 15 sustainability leaders from companies ranging from global fashion brand Levi’s to Philippines banking-to-shopping malls conglomerate SM Investments to find out what it takes to be good at their jobs.
Company all-knower
Knowing the business inside-out reveals risks and opportunities.
Sustainability is not just a desk job. It requires getting your hands dirty to get a feel for every part of the business, no matter how immaterial to the sustainability ambitions of the company it may seem.
This is a lesson that Hendrik Rosenthal, group director of sustainability at Hong Kong-based power company CLP, learned during his time at the Ontario Ministry of the Environment, Conservation and Parks in Canada, where he was a policy analyst.
Rosenthal’s role involved preparing research reports and running assessments for wastewater treatment plants, but he was often out in the field lifting manhole covers and negotiating with cockroaches, he says.
Knowing the business inside out helps to track performance.
CLP, which in Hong Kong sources more than half of its energy from coal-fired power plants, aims to reduce its carbon intensity by 80 per cent by 2050 and invest more in renewables. But finding places to put wind farms and solar panels is tricky in a mountainous, space-constrained city of energy-guzzling skyscrapers.
“I need to understand the full portfolio of our business to consider how we can decarbonise our Asia Pacific operations in a responsible manner,” he says, pointing out that keeping the lights on and elevators running is essential in a city that never sleeps.
“Imagine just 10 minutes without power in Hong Kong. People would get stuck in elevators. It would be chaos,” he says.
Sustainability officers need a comprehensive understanding of the business and the material risks and opportunities. This is the language that the president and the board speak.
Koleen Davila-Palaganas, vice president for sustainability, SM Investments Corporation
Being a business all-rounder gives a better sense of where the risks to the business lie, and the skill sets needed to tackle emerging problems.
A new risk for power companies, for example, is cyber security. “This is not just about securing customer data, but keeping the infrastructure safe. A cyber attack [on a power company] just cannot happen. We need to ensure we’re not exposed,” says Rosenthal.
Being in touch with every corner of the business brings opportunities too. “It was one of our housekeeping staff who came to me with the idea to recycle used soap bars,” says Melanie Kwok, the Cambridge-educated group senior sustainability manager of Sino Hotels, one of Hong Kong’s largest hotel groups.
Talking to staff in every department is key to the sustainability of the hospitality industry, which suffers from high staff turnover. “Other hotels just focus on fire regulations [for new staff]. But we have a sustainability training session for all of our new people, from IT staff to the gardeners,” says Kwok. “People need to experience sustainability for themselves.”
“The best CSOs are those who take the time to talk to people in and outside the company—to truly understand what is being said and what isn’t,” says Pat Dwyer, founder and managing director of sustainability consultancy The Purpose Business, and a former corporate director of CSR and sustainability at Shangri-La Hotels and Resorts.
Listening in budget meetings and brainstorming sessions can provide valuable insight for sustainability projects too. It also gives sustainability officers a sense of where the senior leadership’s comfort levels lie, and where change in the business is afoot. This will help to hone projects and win internal supporters, says Dwyer, whose work for Shangri-La included Embrace, a project that committed every hotel in the group to help a children’s organisation.
CSOs need to get out of their comfort zones to get a healthy picture of the challenges and opportunities that lie around the corner. “Actively listening to industry leaders outside of your sector can give you much needed information on the competition, and valuable intelligence on customers. And it can bring fresh perspectives to internal teams which may have a tendency for tunnel vision,” she says.
Original Article: https://www.eco-business.com/news/doer-thinker-dreamer-agitator-what-makes-a-great-sustainability-leader/
