The already crowded C-suite just got a bit cozier. The chief privacy officer and chief security officer had barely settled in before having to make room for a new entry: the chief sustainability officer (CSO). Considering that even chief information officers, whose job was created about three decades ago, still complain of being ignored and purposely kept out of the loop, there’s room for healthy skepticism about this latest management bandwagon. Is this proliferation for real, or is it all just another management fad to nowhere?
In some cases, it appears that the CSO is simply a rebranded environment, health, and safety (EHS) officer. At a minimum, the CSO is charged with helping the organization develop strategies for protecting the environment and helping it benefit from doing so (that’s about as good a job description for this role as is available so far), but the CSO has no executive-level responsibilities. In more and more instances, however, the job is more substantive. Companies are creating CSO positions to foster a set of programs relating to climate change, carbon emissions, recycling, pollution, natural resource conservation, and energy use. How much heft the CSO carries depends, naturally, on where the job sits in the corporate hierarchy. “You can tell a lot by [what person] the position reports to,” says Timothy O’Brien, a partner at management recruiter Heidrick & Struggles, who has conducted several searches for sustainability executives. “If the CSO reports to the vice president of human resources or legal affairs, then the company probably isn’t that serious [about the position].”
Reliable statistics on the number of CSOs aren’t available, and some CSOs use a different title, such as head of environment and safety, corporate citizenship, or corporate social responsibility.
One sustainability officer convinced that the trend is making a real difference is Susan Cischke, who in April 2007 was named senior vice president for sustainability, environment, and safety engineering at Ford Motor Company. New CEO Alan Mulally personally made the announcement, and the former mechanical engineer is one of 14 executives who report directly to Mulally. “I feel I have a very good seat at the table right next to Alan,” Cischke says. “What’s so powerful about this is that Alan has made it very clear that this is important, since all of our decisions have sustainability implications.”
The same elements make it a difficult job. Cischke must be skilled diplomatically, and her communications talents must be razor sharp, because she has to reach across many functions within Ford. “We have people responsible for the environment and safety at our plants and for our products,” she says. “But my job goes beyond that. It encompasses all products.”
Cischke’s first priority is to devise a sustainability strategy for Ford that stretches beyond 2020. To do that, she needs to persuade product planners to share what they are developing, convince research and development executives to quantify the environmental impact of technologies they have on the drawing board, and win over skeptical manufacturing executives who may not yet believe that they can make cars efficiently and inexpensively with less ecological cost to the world around them. In all these endeavors, however, she has to remember that Ford is in business to make money. “If you’re just trying to do something for the environment, and it isn’t very economical, then you’re going to be out of business,” Cischke says.
Making sure that executives like Cischke are living up to their title is the mandate of investor groups such as Innovest Strategic Value Advisors, which rates 2,300 companies globally on environmental and sustainability issues. Innovest examines each organization’s reporting structure and documents whether the company has environmental protection and conservation initiatives already in place when a sustainability officer appointment is announced. But the group is also interested in whether boards of directors have committees dedicated to these concerns. “We interview companies and try hard to understand what’s just a press release versus something more substantial,” says Innovest President Hewson Baltzell.
Done right, corporate sustainability efforts can please investor groups and outside critics — including such organizations as Environmental Defense and the Rainforest Action Network — at the same time they represent smart business. That was Dow Corning’s goal in December 2005, when the company added Peter Cartwright, executive director for environment, health, and safety, to the company’s 14-person executive committee, its key decision-making group. “The biggest driver for us regarding sustainability is that our customers are telling us that’s what they want,” says Cartwright, who is based in South Wales, U.K. “Customers are interested in environmentally friendly products, energy efficiency, and reducing waste.” He notes that a global survey of customers showed that for 80 percent, sustainability was a key factor in buying decisions.
Cartwright also tracks the impact of energy consumption and waste production on profits. “Energy is getting more and more expensive,” says Cartwright. “So by doing what’s good for the environment, you’re saving money at the same time.” With Cartwright’s encouragement, the company recently broke ground on a US$50 million plant in the British Midlands that seeks to reduce emissions and increase the recyclability of various silicon-based chemicals.
Some companies are particularly creative about their approaches to sustainability and the people who manage those efforts. Wal-Mart CEO Lee Scott has created a program called “Sustainability 360” and has hired people from nongovernmental organizations to implement it. One small but telling step: Because of its work with Environmental Defense, Wal-Mart no longer lets trucks at its distribution centers idle their engines while loading and unloading. Now they turn the engines off, reducing fuel consumption and emissions and saving money at the same time.
General Electric CEO Jeffrey Immelt has also made a splash by naming Lorraine Bolsinger head of the company’s Ecomagination initiative, which similarly aims to position GE as an environmental leader. Her job is to reduce the emissions generated by GE-manufactured equipment, such as jet engines and electric turbines, while coming up with plans to take advantage of sales opportunities in water treatment and alternative energy sources around the world. Bolsinger worked her way up through the company’s energy, aerospace, and aviation divisions, and now has clout in fiefdoms that don’t always cooperate with one another: marketing, sales, environment, health, and safety.
Heidrick & Struggles’s O’Brien says companies are looking for a “new breed” of executives to fill CSO-type positions. In the past, he says, EHS officers were like auditors. They primarily managed statistical reporting processes, working with low-level government officials to produce data about such issues as factory safety.
The new sustainability chiefs are different. “I’ve seen a pretty dramatic rise in the demand for business-oriented, articulate, strategic-thinking executives,” he says. “They have to be able to communicate persuasively to everyone from the shop floor to board members.”
Ultimately, the sustainability officer may go the way of the chief quality officer or the chief learning officer, as companies absorb the key messages that these executives emphasize and embed them into core business processes. But that won’t mean that the creation of sustainability titles was an empty exercise. “It’s not Greenpeace or fringe stuff anymore,” O’Brien says. “It’s become mainstream.”
William J. Holstein ([email protected]) has covered China for more than 25 years, since serving as a correspondent for United Press International in Hong Kong and Beijing from 1979 to 1982. He is a contributor to the New York Times, Barron’s, and Fortune.