Last summer Professor Alison Taylor (who has just published an excellent book “Higher Ground: How Business Can Do the Right in a Turbulent World) and I published an article in the Harvard Business Review titled “The Evolving Role of the Chief Sustainability Officers.” The tagline asserted “They once focused on optics and reputation. Today many are interacting with investors and helping set strategy.”

Our article was based on interviews with 29 leading CSOs and 31 investors. We noted that “Historically CSOs have acted like stealth PR executives—their primary task was to tell an appealing story about corporate sustainability initiatives to the company’s many stakeholders, and their implicit goal was to deflect reputational risk.” In the companies we studied this was changing rapidly over the past two to three years. Interestingly enough, this was especially apparent for companies in challenged industries such as athletic wear (e.g., Nike), food and consumer goods (e.g., Unilever), electric utilities (e.g., AEP), mining (e.g., Vale) oil and gas (e.g., ConocoPhillips), packaging (e.g., Greif), retailing (e.g., Groupe Casino), and tobacco (e.g., Philip Morris International).

In the best companies when it comes to really integrating material environmental, social, and governance (ESG) issues into strategy and capital allocation the CSO has a much more strategic role and is closely integrated with other functions, such as finance, operations, product development, and technology. Sustainability professionals no longer simply reside in the function itself but throughout the organization. CSOs are joining meetings with investor meetings, and with both the ESG/stewardship teams and portfolio managers. At the same time, investors are seeing more integration between these two roles. People in the CSO role have also changed. Instead of coming up through the sustainability function (still called corporate social responsibility in some companies), CSOs are coming from functions more core to the company such as finance, investor relations, operations, product development, and research and development.

Alison and I were well aware of the fact that we had chosen a selected sample of companies since we were looking to find the leading edge of practice. This obviously begged the question of what’s going on in the more general population of CSOs. Towards that end we teamed up with GlobeScan, where the team was led by CEO Chris Coulter, and Salesforce, whose team was led by Brian Komar, Vice President Global Sustainability Solutions. In November and December of 2023 we conducted a global survey that resulted in 234 responses (mostly from the sustainability function but also others, such as finance and technology) in a wide range of industries. The results showed that the rest are a long way from being the best. Here is the full report, “Sustainable Value Creation: Closing the gap between commitments and operational realities.” You can also watch a webinar hosted by GreenBiz and moderated by Grant Harrison, Director Sustainable Finance & ESG, where Chris, Suzanne DiBianca, EVP & Chief Impact Officer at Salesforce, Alison, and I discuss the results of the survey.

The hope and good intention are there. Ninety-three percent of respondents felt that sustainability was very important or fairly important to commercial success. From there it unravels, showing a serious lack of real commitment which demonstrates the sorry state of sustainability for many, if not most, companies today. Only 37% of respondents saw sustainability as very integrated into the core of the business. Only half of senior management teams (SMTs) are focused on sustainability risks, opportunities, and impacts. Only quarter of companies are devoting sufficient capital to sustainability initiatives. One result of this is that the lack of high quality data on sustainability performance is enormous. While 95% believe that high quality data is very or fairly important only 29% report having it. One reason is that lack of integration with the finance and technology functions, although that is improving.

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