Every other year for the past 12 years, sustainability executive recruiter Ellen Weinreb has surveyed chief sustainability officers at publicly traded U.S. companies.
The sixth biennial report, just out, looks only at professionals who hold the title chief sustainability officer, yielding a valuable perspective of the field over time. For the most recent report, her firm, Weinreb Group, surveyed 183 CSOs and received a 39 percent response rate — just over 70 execs.
It’s been a wild few years in the profession — pandemics, wars, energy crises and all the rest — at the same time that the climate crisis, ESG data and other issues have raised the profile of sustainability issues inside companies. How have these events changed the CSO profession?
I recently talked with Weinreb to look at key trends. The conversation was edited for length and style.
Joel Makower: One of your findings was that CSOs are gaining scale and influence. We can talk about influence in a second, but talk a little about what it means for a CSO to gain scale?
Ellen Weinreb: Scale refers to the number of direct reports a CSO has. Twelve years ago, there were on average four direct reports to the CSOs, and now there are eight. And we’re finding that there are sustainability professionals throughout the company. We asked CSOs to name the number of employees that have sustainability in 50 percent or more of their job. The average number was 26.
Now, a lot of chief sustainability officers are working directly with boards.
Makower: How has all this affected the influence that CSOs have?
Weinreb: Twelve years ago, the biggest question was, "Are you reporting to the CEO?" Now, we're finding that a lot of chief sustainability officers are working directly with boards. Of the survey respondents, 99 percent said they are engaged with the board. So, 55 percent are engaged specifically with the nominating and governance committee, 45 percent are working with a standalone ESG committee and 22 percent are with the audit committee.
Also, we found that 76 percent of the CSOs are on the leadership team, and that was up from 41 percent 12 years ago. And 43 percent of the CSOs serve as corporate officers.
Makower: I assume that not all CSOs report to the CEO.
Weinreb: That's correct. About a third report to the CEO. So, I think the bigger question is, "Well, if they're not reporting to the CEO, then who are they reporting to?"
Makower: That is the question. Who are they reporting to? And does where a CSO reports make a difference?
Weinreb: It does make a difference. Twelve years ago, about 16 percent reported into the marketing function. Today, that would be considered not a good place because there's so much concern about greenwashing. So, now there's 0 percent reporting into the marketing function.
We also have an increase in the number reporting to the general counsel. It used to be that the general counsel was not where you wanted to report, and now it very much is where you want to report. For the most part, CSOs are reporting into the chief operating officer or the head of strategy, if they're not reporting to the CEO.
Makower: Diversity has long been an issue in this field, not gender so much as racial. What changes are you seeing?
Weinreb: When it comes to gender diversity, we found 58 percent of CSOs are women; it used to be around 50 percent.
When it comes to racial diversity, it feels like it's not moving fast enough. If you look at the percentage of women and how it's doubled in the past 12 years, for racial diversity, that number hovers around 18 percent. I think it's moving in the right direction, but it's taking time to build the pipeline. I do think that's going to be a finding when we do the report next time around — it will start to finally catch up when it comes to racial diversity among CSOs.
Makower: One of the things that caught my eye in the report is that you mentioned that the most effective CSOs are corporate chameleons. Can you explain what it means to be a corporate chameleon in this context?
Weinreb: In general, corporate chameleons are those who can translate complicated information into the language and the behaviors of the stakeholders whom they're talking to or influencing. And the CSO role is such a heavy influencing role. One thing that CSOs do is take what's going on in the world and translate it into ways that can be effective and valuable for their companies.
So, when it comes to the corporate chameleon, there's continually more and more things being thrown at these CSOs, much like what's going on in this volatile world. You've got the banking crisis, Black Lives Matter, the pandemic — all these things cross the CSO’s desk. And their role as corporate chameleons is to interpret them in ways that will help place their company in a way where they understand their relationship to society and the planet.
Makower: Do you think CSOs are keeping up with all this going on? It seems like that's a lot to take on.
The top skill required for the CSO role is being a corporate chameleon.
Weinreb: One of the other competencies of CSOs is that they're incredibly resilient. They take whatever is thrown their way. And we can assume it's going to be volatile, right?
Makower: Indeed, because that's what today’s world is like. How is all this affecting the skill sets that an effective CSO needs to do the job?
Weinreb: We asked the CSOs to identify what top skills were required for the role. In addition to corporate chameleon, there's also influencing without authority — that comes up all the time. And really understanding strategy and vision. One of the other findings is that they're aligning the sustainability strategy more to the corporate strategy, integrating sustainability more into the company at large.
Makower: So, when you do your next study, in 2025, how will things be different? You already mentioned racial diversity being one of the growing trends. What else do you think will be the story?
Weinreb: I'm always waiting for the shoe to drop. I wonder at what point we will reach peak CSO, when the number of CSOs stops growing. And let's recognize that this report is looking very specifically at this one title. There's a lot of amazing companies that have incredible resources and are doing great work, but they call their head of sustainability something else. You've got companies like Amazon, Apple, Nike, Hewlett Packard and other big brands that are devoting a lot of resources to sustainability. And they're not newcomers.
So, who are the newcomers down the pike? I think industries like infrastructure and utilities, private companies, smaller companies certainly could be naming a CSO for the first time. Our research wouldn't necessarily cover that if they're not a publicly traded U.S. company. I think that's something that we want to look out for going forward.
Thanks for reading. You can find my past articles here. Also, I invite you to follow me on Twitter and LinkedIn, subscribe to my Monday morning newsletter, GreenBuzz, from which this was reprinted, and listen to GreenBiz 350, my weekly podcast, co-hosted with Heather Clancy.