Even at this advanced stage of our climate and resource debacle, sustainability practitioners still do not possess the same status in corporations as their purely business-minded brethren. How do we get sustainability officers both the recognition they deserve and the clout that should go with it?
Last November, we at Valutus ran a piece in our newsletter entitled, “Periphery: On the outside looking in.” We noted that, even at this advanced stage of our climate and resource debacle, sustainability practitioners still do not possess the same status in corporations as their purely business-minded brethren. The article was based on a survey of the ‘about’ sections of corporations where top sustainability influencers work, to see if those individuals made it to the masthead. In a word: They didn’t. In case we were inclined to doubt the implications of that finding, this month we came across a list — compiled annually by longtime sustainability recruiter Ellen Weinreb — naming each and every US publicly traded company with a Chief Sustainability Officer. All 44 of them.
The report is interesting reading, but perhaps the most compelling metric is this: when the list began in 2011 it chronicled 29 CSOs. In other words, we’ve added a whopping 15 CSOs in the last 8 years. Fifteen! That’s under two per year, during the hottest decade in recorded history! Here we are, in the Year of Our Climate, 2019, and only a handful of our biggest corporations have broadened their C-Suites to include a CSO. And, as one sustainability expert told Valutus, “Of the 44 current CSOs, if you ask how many of those have the real authority of a C-level position, the true answer is: Zero.”
So, what’s up with that? Are the vast majority of companies doing nothing to further planetary sustainability? Are their lower-level Heads of Responsibility, Executive Directors of Corporate Citizenship, Global Sustainability Leads and the like mere functionaries without influence or value? Certainly not. So, why don’t they inhabit a corner office — and real power — in every major corporation?
Before we answer this, consider the following two items. The first is a conversation we had with the CFO of a multi-billion-dollar corporation, who said, “There are only two people who come into my office asking for money without numbers: HR and Sustainability.” This is one reason we aren’t invited to shake the trees from the C-Suite: We’re not seen as true business partners who speak the language of profits and tie our efforts directly to our company’s financial success.
The other is the parable of the Chief of Sustainability who wanted to replace the lights in every facility with LEDs. She had numbers, the project beat the hurdle rate for the investment, it had tangible benefits for utility and maintenance costs, and had environmental meaning. But the CEO and CFO intuitively thought, “That’s nice, but that’s not our core business. We don’t compete on how well we manage our real estate and energy bills; we compete on the core engine of our business … and lighting isn’t it. We’ll invest in a production project instead.”
What do we do about this sad state of affairs? How do we get sustainability — and the chief officers thereof — both the recognition they deserve and the clout that should go with it?
There is only one way: We must demonstrate — in clear and unequivocal ROI terms — that sustainability is an absolutely *critical *driver of bottom-line performance in the company’s core business (this can be either the company’s current core business or a possible future one).
The 2018 Report of the Global Commission on the Economy and Climate concluded that by the year 2030 — 12 years hence — the amount of money humanity could save through a global shift to sustainable development is $26 trillion. With a “T.” The pie is huge, yet we generally don’t get our companies to buy a slice, and the reason we don’t is simple: Valuing what we do is hard. What we deal with is far harder to quantify than many aspects of the business — and much of its value is submerged, invisible without careful analysis.
Standard ROI from stronger sales or more efficient processes has been studied down to its atoms, tools created, methods developed. Not so with the value sustainability produces, even aspects that are relatively intuitive, such as that living the company’s values improves talent acquisition and staff retention. How about sustainability’s ability to reduce risks or increase innovation? Can the value of those effects be quantified? This stuff is hard, but until we can do it we can’t expect to march into corner offices, demand big money — or even big respect — and get it.
Valutus has spent years building a set of valuation tools for exactly this reason, because until we have the ability to point to clear, business-oriented benefits — whether related to materiality, innovation, risk, talent acquisition and retention, sales or strategy — sustainability will continue to be seen as an afterthought by too many. And until we can put quantified, concrete value — including surfacing and quantifying value that is currently submerged — we will continue to be less effective at driving the changes the world needs.
In other words: It’s up to us! It is our task to create demand for CSOs in every C-Suite, by building the same financial, dollars-and-sense business case for our projects that every business runs on. And it is up to us to take the strategic tack of making our projects so central to the business’s core drivers that they simply can’t be ignored — and neither can we.