The rise of the chief sustainability officer

Written by Rajiv Tikoo | Updated: Jul 1 2008, 03:26am hrs
When Mitsubishi International Corporations president and CEO Ryoichi Ueda was asked to double as parent companys (Mitsubishi Corporation) chief sustainability officer for North America earlier this year, it brought into limelight the trend of appointing sustainability managers at senior levels. Today, more and more companies are appointing chief sustainability officers, who report directly to CEOs.

Its a step up from the usual practice in most companies where the EHS (environment, health and safety) heads job is to comply with government regulations on safety and pollution and the CSR (corporate social responsibility) heads job is to engage in corporate philanthropy. In fact, companies like HSBC started using corporate responsibility for social responsibility long back. The term has evolved into corporate sustainability.

Explains Malini Thadani, head of group communications and corporate sustainability at HSBC India, Sustainability is an all pervasive term that integrates a companys business objectives and vision with that of the environment it works in.

A CSOs role calls for integrating sustainability in the DNA of the organisation and pushing up the topline. For example, Moumita Sen Sarmas role as vice-president and head of microfinance and sustainable development at ABN-AMRO Bank (India) is to work towards including triple bottomline (TBL) in the banks day to day operations. It includes influencing business departments to see the value of TBL and internalise the thinking in their daily operations.

Last year, ABN-AMRO launched Indias first socially responsible investing (SRI) fund called the ABN-AMRO Sustainable Development Fund. Moumita Sen Sarma had a key role in engaging with the banks asset management group to provide the rationale for sustainable development in such a product and ensure that all TBL issues were addressed in the offering. She adds, My role also includes stakeholder engagement and benchmarking sustainability performance thro-ugh reporting, besides spearheading all community investment activities of the group through ABN-AMRO Foundation India.

The emergence of the CSO also indicates that companies mean business. Says Annapurna Vancheswaran, director of sustainable development outreach at TERI (The Energy and Resources Institute), The mere fact that companies are taking serious note of this function and position also means that they cant be accused of greenwash. This is evident from the reporting structure of a sustainability manager in an organisation. She also coordinates the work of TERI-Business Council for Sustainable Development (India).

She elaborates that the demand on companies to not only exhibit their concerns, but also to prove their commitment is on the rise. And they are not shying away from it. This is clearly evident from the number of companies that apply for sustainability awards all over the world these days. The increase in number of applicants each year is an indication that companies are now ready to be examined by people outside their organisation.

A CSOs role calls for a different skill set. He/ she has not only to be familiar with the nuances of the operations across most of the verticals in a company, but also be aware of the latest trends in sustainability development so as to pick up appropriate policies, practices and technologies and work towards deploying them profitably in the company. Its not only about having technical skills, but also about thinking ahead.

Moumita Sen Sarma explains that it basically calls for a commitment to make a difference in the society and an interest in the subject. Knowledge of the countrys socio-economic structure, primary development issues and challenges and ability to see the linkages are key assets. She adds, Of course, a deep knowledge of the banks business and its attendant challenges are crucial for being effective.

Its easier said than done. The work is full of challenges. The internal challenges include lack of policies, practices and precedents as well as the lack of appreciation of a CSOs role in the office. It may be still seen as an add-on or extension of CSR by most of the staff.

Moumita Sen Sarma says, It calls for buy-in from each individual employee to embed sustainability truly within the organisation. To create awareness and also to have an army of dedicated volunteers, ABN-AMRO recently developed and held a training programme called Magic Hands. About 100 employees were trained in key areas of sustainable development, including poverty alleviation and microfinance, biodiversity and conservation, and climate change and carbon footprint reduction.

Saying that the relevance of sustainability for an organisation is increasingly accepted and established top down in large organisations, Malini Thadani adds, The challenge now lies in broadening this concept across the entire organisation. She gained the support of staff across the board by engaging them in innovative volunteering activities that allow them to participate in community development and to benefit from this professionally and personally through self-actualisation, team building and finding new business opportunities where none would have been otherwise observed by them. She adds, This job is becoming increasingly a strategic one for realising the vision, objectives, goals and targets of a company.

Despite the challenges, the future of CSOs seems bright and they should rank sooner than later along side chief financial officers, chief marketing officers and chief energy officer. The reasons are obvious. The environment, particularly climate change, is going to be on top of the global agenda for years. Today rich countries have the obligation to cut down on greenhouse gas emissions. Tomorrow it may be the turn of advanced emerging countries or multinational businesses.

Saying that the past twenty years have seen a radical change in the relationship between business and society, Annapurna Vancheswaran says that the growing evidence of climate change and its associated risks to businesses are rapidly making sustainable development and good practices a business imperative. Considering the significant impact businesses have on society, she adds, they are becoming more vulnerable to being challenged vis-a-vis their business practices and environmental footprint by NGOs and the communities they operate in. So, it makes business sense to be environmentally correct and have a pointsperson at the senior most level for effective action. The role of a chief sustainability officer is becoming vital because sustainable development is now a business imperative, she says.