Companies want to be known for their ESG efforts and seen as businesses that care. As a result, we are seeing more businesses bringing on sustainability roles than ever before, including CSOs, sustainability directors and sustainability managers. This increase has been met with much praise, but for many of us who work with businesses to measure, manage and improve their impact, this shift has been met with a mixture of criticism, doubt and questioning.
What kind of power do these roles have and what kind of positive change are they actually creating? There is no doubt that these roles signal a shift in business and its accountability, but in order to have true positive change, a deeper review of the CSO role, who they report to, and how they operate must occur.
Three questions interest me when a company shares a sustainability report or tweets about a new impact-related program:
- Who is aware of the negative and positive social and environmental impact of the policies, products, services, supply chain, etc. of the company?
- Who is having conversations about the short- and long-term ways the business is affecting its stakeholders?
- Who has impact-related metrics as a part of their job description and performance reviews?
For some companies the answer is no one, at best a handful of individuals and at times just one person. Even the most traditional companies are hiring sustainability, ESG or impact-related roles — a 228 percent-plus increase in the role in Fortune 500 companies since 2011. This signifies a shift in the market and a change in what is expected and demanded by consumers. That being said, are these roles simply token positions or signs of greater organizational change occurring?
Roles focused on impact and sustainability are important and should be encouraged. They bring in specific expertise needed on particular ESG topics, allow the business to have a dedicated person for certain projects and show a company’s willingness to invest resources into improving its impact. What has become common, however, is for the one person to be the sole person in charge of the "purpose" of the business. Being a purposeful business is more than a mission or purpose statement or an annual impact report. Purpose is about living and leading with a mindset that is focused on making a positive difference on all stakeholders affected by the business — both socially and ecologically. This means being a business with purpose is a choice that gets made every week, every day and every minute.
We often do better when we know we are not doing something alone.
Purpose-washing is real, and even with the best intentions businesses can fall victim to its enticing grasp. While it is easier to hire a sustainability director and call it a day, being a purpose-led business requires more involvement and more shared accountability. Shared accountability can be separated into three levels: Individual/self, team/department and company/organizational. The first level represents accountability an individual has for themselves. The second broadens to accountability for a department or team. And finally, at the highest, the accountability to the organization or company as a whole.
The scope of accountability is different for each level, but importantly, it means everyone is a part of the larger picture. As we think specifically of impact measurement and management, the reality is unless we are accountable to the company’s overall sustainability goals, we are not going to achieve what we want to achieve. Shared accountability shows a true commitment to being a purpose-led business.
When accountability for the short and long-term impact of a company is shared, a few things are possible:
- The shared accountability equates to a higher chance of better performance across the company.
- Employee engagement increases.
- Policies and programs in place to address negative impact and increased positive impact see longer lifespans with better outcomes.
1. Shared accountability equates to a higher chance of better performance
I recently had a conversation with someone on the topic of accountability. We were complaining about how certain world leaders and corporate executives need to have more accountability for their actions. We were in alignment. As soon as I turned the conversation around to brainstorm what we should be doing to hold ourselves accountable, I hit a roadblock. Bringing the topic of accountability closer to home, to the self, was met with resistance and discomfort. It is often easier to complain and point fingers than admit that we too often are accountable for some piece of the problem and therefore solution.
When we extend accountability of ESG goals beyond just one person's role, a few things can occur related to employees’ performance. Firstly, there is clarity on what each person and team are accountable for and therefore more clarity on what they need to do to achieve the goals they hold. Secondly, a connection is made with the broader purpose of the business with each employee, regardless of their role and tenure. Third, with more clarity, focus and a connection to purpose, there is often an outcome of better performance. And finally, the business as an entity can be held accountable for the collective actions and impact it has, with multiple people involved to help understand, measure and report on that accountability.
We often do better when we know we are not doing something alone. We often do better when we have others who we can learn from along the way. We often do better when accountability is clear, it is shared, and it is celebrated as a way to truly understand if we have the purpose we hope we do as a business.
2. Employee engagement increases
Studies have shown that many employees want to work for companies that align with their values and that it increases their motivation too. Deloitte found, "44 percent of millennials and 49 percent of Gen Zs said they have made choices over the type of work they are prepared to do and the organizations for which they are willing to work based on their personal ethics." They want to work for a company that does more than just make money but also is aware of its short- and long-term impact and strives to do better. Knowing that this is an important factor for employees, it is only natural that being a part of the very conversations that contribute to this kind of impact will lead to some employees feeling more engaged.
By extending the accountability of short and long-term impact of the company beyond just one person, we suddenly have multiple people and departments aware of policies and programs and who is playing a role within them.
Let’s use an example. A CSO may be accountable for understanding and making decisions related to the company’s environmental footprint, which could include measuring environmental key performance indicators, reporting on them over time and creating programs and policies in response to findings. When we broaden this accountability to include every employee by asking them to be accountable for their own environmental footprint while working (using energy-efficient lighting options in home offices, turning off lights when leaving a conference room or tracking work-related travel) we suddenly have a small way for employees to recognize that they are part of the equation and can have a direct effect with the company’s goals and impact.
Furthermore, including employees in the conversation of impact measurement and management allows fresh, new ideas to be shared from a diverse group of people with different backgrounds and life experiences. It also allows for new problems to be identified that the business was not aware of previously. Of course a CSO can take the lead on putting these ideas into action, but it is the process of including employees in the narrative and conversation that is good for engagement and also business.
3. The lifespan of policies and programs to address negative impact and increased positive impact grows longer
The goal of most CSOs is to make lasting change within the business and create positive change for its stakeholders. They want their programs and policies to survive for years to come and be sustained through times of change. The reality, though, is that we operate within a short-term focused society and system, where businesses are often not looking at how their decisions will impact future generations. For CSOs, it is even harder to make these kinds of decisions when you are making them in isolation, knowing that a business’s commitment can change the minute a new CSO is hired or resources run short and one is let go.
By extending the accountability of short and long-term impact of the company beyond just one person, we suddenly have multiple people and departments aware of policies and programs and who is playing a role within them. If one person leaves, the purpose and intended outcomes of the policies and programs are not lost, and others are able to continue those forward. Most impact takes multiple years to come to fruition and understand. Longevity and consistency of policies and programs is more likely to occur when there is accountability for them throughout the organization.
CSOs are needed and vital, but if they operate alone and are the only ones holding accountability for an organization’s ESG goals, we are setting ourselves up for failure. We need an economy that is more inclusive, equitable and regenerative. We can only get there if corporations as a whole move beyond profit maximization and prioritize shared accountability of impact measurement and management to create real and tangible positive impact for their stakeholders and to minimize negative impacts.