The role of the chief sustainability officer (CSO) is undergoing something of a transformation. According to EY, at some corporates, there are CSOs who have the teams, budget and authority to deliver real change on carbon reductions. Meanwhile, the consultants at Capgemini describe today’s CSO as a “new breed” of passionate leader (which sounds more like a strapline from a Vin Diesel film).
No pressure, then – so long as you can perform at superhero levels, sustainability challenges ranging from net-zero and equality to nutrition and nature protection are all in hand.
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By GlobalDataOf course, life isn’t like a movie and CSOs are not heroes. In fact, until relatively recently they were largely hidden, or non-existent. Nowadays it’s a rarity not to have one – especially in the food sector, which has a high level of scrutiny thanks to its recognisable consumer-facing brands, considerable environmental footprint and sprawling supply chains.
PwC estimates that, globally, companies appointed about as many CSOs in 2020-21 as in the previous eight years combined. Half of consumer products companies have CSOs, compared to 28% in the automotive sector and 25% in banking. North America, which in 2004 reportedly named the first CSO at a public-traded company (Linda Fisher at chemicals giant DuPont), has the most CSOs, but Europe is fast catching, thanks to what Paul Gosling, national director for sustainability at HR and recruitment firm Hays, refers to as a “ripple effect”.
Gosling, who has recruited into environmental roles for 30 years, actually feels some are too “obsessed with the term ‘chief sustainability officer’. “It’s more about where the role sits in the business and the influence the person has over the boardroom,” he explains.
Stealth and sustainability
In a column for Harvard Business Review last July, Robert Eccles, a visiting professor at Said Business School at Oxford University and Alison Taylor, clinical associate professor at New York University’s Stern School of Business, detailed how CSOs have evolved from “stealth PR executives” (their task being to tell an appealing story CSR initiatives to whoever would listen) to “spearheading the true integration of ESG issues into corporate strategy”.
They offer examples: how in some companies CSOs are more involved in investor meetings; how they have adopted a more strategic position within the business – and now steer the company over tricky topics and inevitable trade-offs. Should we plump for paper packaging or recycled plastic, for example? Are the emission savings from intensive meat production worth the potential animal welfare backlash? Or still (remarkably) in some cases: is it necessary to set a science-based target across all emission scopes?
Currently, the trade-off many CSOs are grappling with is price versus planet. ESG hasn’t dropped off the radar for the C-suite but there is concern budgets are being constrained.
EY research in June last year shows sustainability programmes are rated the most important long-term investment priority for CFOs but are also the most likely initiative to be cut or paused to hit short-term earnings targets. The consultancy’s research among CSOs more recently found one in five companies revised their climate commitments in the past year.
“[…] there is a growing polarisation of organisations, with the gap between ‘pacesetter companies’ (those taking the most action on climate change) and ‘observers’ (those who have taken the fewest actions) widening significantly,” EY global vice chair for sustainability Amy Brachio said. Even pacesetters show signs their progress is plateauing, she added, with significantly fewer organisations fitting the definition of pacesetters compared to 2022 (7% versus 32%).
Price, pace and patience
Among some of the CSOs Just Food approached there was acknowledgement of the real-life realities of driving much-needed change within the constraints of a sector faced with rising inputs, supermarket price wars and thinning margins.
“You have to be empathetic to the business priorities, the demands of consumers, the asks of suppliers and customers – and that means understanding the commercial pressures on consumers and customers too,” says Fran Haycock, head of sustainability at Greencore, which makes convenience foods including pre-packed sandwiches and chilled soups for grocery and foodservice companies in the UK and Ireland. “This [job] is about disruptive leadership done well and you have to find that sweet spot between pace and patience.”
Some might argue there is little time for patience when it comes to the climate crisis or biodiversity loss or resource scarcity. But, while few people (and indeed employees) would cavil at attempts to curb carbon emissions, protect farm workers, value ecosystems or restore nature, there are commercial targets underpinning company performance. As one CSO, who prefers to remain anonymous, explains: “The procurement team is under pressure to source ingredients for the same prices they were getting before.”
That isn’t sustainable and part of the CSO’s role is to explain that. They must be an internal advocate for change as well as an external one (which we will return to). It’s not always easy, mind. “The biggest skills gap I see is the massive gulf between what senior business leaders understand and what the sustainability experts understand,” says a former senior director of sustainability in a food business. “In a Venn diagram, there’s very little overlap and I think they’re both a bit frightened of the other or paranoid about their own ignorance.”
Commerce before carbon?
This perhaps explains why some companies are looking to those with finance, commercial, leadership and strategy experience to fill these sustainability roles. Sally Smith, CSO at Upfield, started working in risk and finance at Diageo, which has set her up for the evolving demands of today’s CSO.
“I have always looked at where I can make a difference,” she explains. “I was good at getting stuff done, at getting leadership buy-in and holding teams to account through performance management and delivery. I’ve worked in operations, strategy and communications functions, and understanding all of them is critical for a role of a CSO.”
Smith says CSOs will come from a variety of backgrounds but the one thing they’ll have in common is leadership skills. The US branch of international retailer Ahold Delhaize has just named finance veteran Marc Stolzman as CSO. Stolzman, who has held several CFO roles, has “proven leadership and deep financial background [which] will be instrumental in driving our ambitious goals”, says CEO JJ Fleeman.
Eccles and Taylor believe the most logical report for a CSO is the CFO. “Today CSOs help identify and direct attention to the ESG issues that have a substantial impact on an organisation’s financial performance and risk profile.” Some of those we spoke to cite the importance of building teams internally, or seeking external expertise, to cope with the myriad aspects of the job.
Others are worried about a lurch towards hiring CSOs with more commercial than technical backgrounds. A former retail sustainability lead explains: “I see quite a lot of these types of leaders stepping into the space and assuming it must all be far simpler than the techies are making out and surely it just needs some good strategic frameworks and charisma. [But] they need to be willing to listen and learn from the experts, deeply understand the complexities and translate that into the strategic choices of the business.”
It’s not so much a sustainability problem we face but more a complex business model challenge
Kate Cawley, Veris Strategies
A CSO with a technical background partnered with good commercial change makers, or a commercial change-making CSO partnered up with strong experts represents the “ensemble cast” needed to offer resilience, grow revenue and take responsibility, they add.
“The best CSOs now recognise they cannot take sole responsibility to turn [global food companies] around,” says Kate Cawley, founder of Veris Strategies, a consultancy, and the Future Food Movement. “They recognise it’s not so much a sustainability problem we face, [but] more a complex business model challenge.”
C-saw, open the door
How easily the boardroom can be pushed varies. There is frustration among some at the lack of board engagement beyond for example a commitment to net-zero sometime in the future.
Shareholder activists, consumers, the media and NGOs can all help CSOs drive their message home. A story from an NGO can make the board sit up and listen, says one CSO from a medium-sized food manufacturer, noting for example the role of initiatives like the Better Food Index.
Smith at Upfield adds: “Because we make plant-based products and are innovating the future of food, the role of CSO in Upfield is unique. By the nature of our business, sustainability and our ESG strategy is at the core of our business and purpose.” That doesn’t mean it’s easy, or that she can’t disrupt the status quo – the spreads business has recently replaced plastic tubs with paper-based ones and is a pioneer of methane reporting (that some dairy companies have now committed to do, too).
Eccles and Taylor found the shift to a more central role for CSOs was “most dramatically revealed in companies undergoing major business transformations in response to existential challenges”. They said many are in controversial sectors, while some are empowering their function as a response to historic mismanagement of their most negative external impacts.
This is where it can become uncomfortable for incumbents in large meat and dairy companies, for example, or brands associated with large amounts of plastic or deforestation or (as has been the case more recently) river pollution. Recruiting a CSO may also not be easy. “How a business is dealing with all aspects of ESG is so important, both in keeping existing staff and attracting new talent,” says Gosling at Hays. “Whether your business is seen as part of the solution or part of the problem really matters.”
But do CSOs feel they are affecting change? Only 17% of the 520 CSOs and equivalents (at large corporations from various sectors) that EY polled last year were “highly satisfied” in their roles; 42% are not committed to staying with their current employer. “This jeopardises further progress and poses considerable risks to the future continuity and strategic planning of sustainability programmes,” noted Brachio.
Corporate departures
CSOs have already started stepping away from their corporate seats – either into consulting or into NGO or industry body roles (or of course into private equity). Some of those Just Food consulted say this has plenty to do with the tension of having to toe the line for a company that simply isn’t doing enough and effectively wants the CSO to make it look like they are. There is also the “treacle and politics and back pedalling”, adds one expert. “People are drained by it and looking for roles where they can have more impact.”
Indeed, the PwC research showed 50% of consumer product companies’ CSOs are ‘active’ but 46% are so-called ‘light CSOs’ – these have a limited mandate, are two or more hierarchy levels below the C-suite and therefore “lack the influence to shape the sustainability transformation”. EY found 54% of respondents have the authority to hold C-suite peers accountable for their performance on sustainability initiatives, which puts CSOs in a difficult position: “They are held responsible for achieving corporate climate commitments but their company’s business unit leaders are not accountable to them for achieving the necessary results on climate action.”
A supportive CFO goes a long way but the CEO can be key – she or he is the one that can advance the sustainability agenda because they are often the only one who can look into the medium-term and make the painful short-term decisions needed. Gosling says the role of CSO comes down to influence. “You have to make sure that your message to drive sustainability is landing with those individuals and stakeholders that count and that it’s a really, really interesting message.”
Food CSOs have long been pilloried for telling stories about CSR – for being all talk and no walk. That may well still be the case in a sector as large and varied as food manufacturing but communication is at the heart of the new influential, change-maker, commercially-savvy CSO. They have become more involved in investor meetings for example, which can go down well for those seeking answers to those tough trade-offs and wanting a clearer picture on everything from climate risk exposure and governance procedures to portfolio protein balances and packaging reduction plans.
The leadership team need someone they can trust to advise them, prioritise and drive change
Sam Thompson, Billington Group
CSOs at food brands also have to be well equipped to deal with their customers – the supermarkets – and suppliers, now more than ever as the supply chain acts and adapts to climate change, for example. “Communication is so important,” explains Sam Thompson, head of sustainability at Billington Group, the company behind brands including Glorious soups.
“Consider our suppliers of which many are small businesses. We are talking with them about Scope 3 emissions and the need to work on reducing them. We have to be aware that many of them will not even have started on this journey yet. The bigger ones we can be a little more proactive with and look at some of the specifics of what we want because our customers are of course coming to us with similar questions and requests.”
Thompson also has a job on internally to communicate, raise awareness and garner support. “Some of this is also new to our leadership team so they need someone they can trust to advise them, prioritise and drive change in the places that will make a difference,” he explains. “I need to know enough to be considered an expert but part of this role is absolutely about deciding what you need to know and don’t know.”
Peter Hajipieris, who was appointed CSO at Birds Eye Iglo (now Nomad Foods) in 2009 and has also held the position at Regal Springs, has lived this position from its conception more than decade ago. His advice is simple. “It’s what you do in the role that matters.” One thing is for certain: the pressure is still on the chief sustainability officer.
