In a world where sustainability is becoming core to business strategy, the modern CSO must evolve from compliance keeper to enterprise-wide catalyst, says Godrej’s Sustainability Head Vaidyanathan

Byline:  Ramnath Vaidyanathan, Head – Environmental Sustainability, Godrej Industries Group

The story of Chief Sustainability Officers (CSOs) is that of like a sailboat in an ocean, shifting with market currents, headwinds and tailwinds of innovation and the tides of regulation. With ever-tightening regulations around resource use, increasing investor scrutiny of sustainability its impact on business risk, and ceaseless demands of reporting and disclosures, it’s an intriguing times for CSOs as they seek to balance stakeholder demands.

Companies at the top end of the sustainability spectrum, the seasoned weather-worn ships, are already embedding environmental, social, and governance (ESG) frameworks across all their functions. They have established governance at the board-level and their CFO is already looking at quantifying climate risks and opportunities with the same gravitas as financial results. Procurement heads at these organisations debate ethical sourcing and traceability, and R&D teams are incorporating green principles in new product development. For these companies, sustainability is not limited to one team’s job led by a subject matter expert. Expertise and accountability are as wide in its scope as they are deep.

And then there are those organisations at the other extreme, scrambling onto lifeboats, as investor mandates and tightening regulations have them in a frenzy. For them, a CSO is like throwing an anchor into uncharted waters with the hope that this will steady their ship. These companies are assembling sustainability teams not necessarily driven not by strategic foresight but by urgent necessity.

Between these extremes are where most CSOs find themselves at the moment. They are expected to wear multiple hats, each borrowed temporarily from their colleagues across other functions. They must grasp procurement team’s realities of responsible sourcing, the risk team’s calculations of physical climate vulnerability of business operations, the strategy team’s quantification of potential risk and opportunities and even the R&D team’s quest to redefine products through sustainability lens. Their role demands cross-functional fluency and an ability to deliver insights to decision makers as elevator pitches. In many ways, they are changing the way businesses think, plan and act.

At most companies the sustainability journey begin modestly. It might begin on the manufacturing floor with efforts to save energy and lower bills. Perhaps procurement teams moves from road to rail transportation to reduce costs. The attempts are admirable but they fall short in the shadow of expectations on sustainability. An ideal, effective CSO and their sustainability team need to be in the top quadrant –

The CSO must possess an ability to translate complex sustainability initiatives into clear, compelling narratives. It is perhaps the hardest to do but the most necessary. And finally, the CSO must maintain an expansive network of innovators, academics, industry peers, and consultants. They serve as a constellation of lights guiding the way through uncertainties and growing regulations.

The modern CSO can be comparable to an alchemist of sorts as they look to transform broad sustainability visions into tangible value for businesses, but with a larger broader “unknown” future that is getting increasingly difficult to predict. They must recognise how success in sustainability will be measured. Will it be based on investor sentiment, capturing new markets, customer loyalty, financial savings, or groundbreaking innovation? The CSO’s success lies not in delivering on one of these threads but in weaving them seamlessly as a lever of strategic growth.

Increasingly, a few forward-looking CEOs view sustainability as existential and are making CSOs integral co-captains at the decision-making table. These CEOs are moving away from centralised sustainability teams that frame broad strategies towards decentralised, dedicated sustainability roles embedded with individual business units. These bespoke teams craft strategies and initiatives addressing unique operational landscapes and challenges.

Over the next decade the CSO role may ironically grow redundant. It is an odd prediction yet plausible with how sustainability is evolving. What was once specialised is becoming core to business functions. The manufacturing head of tomorrow will have to consider clean sources of energy to reduce costs and emissions. The procurement head will weigh in environmental risks in sourcing decisions. The R&D head will evaluate health and environmental impacts just as they now consider quality, durability and costs.

What does this mean for today’s CSOs and their dedicated teams? They will need to grow and broaden their horizons. They will need to master risk quantification, learn climate finance or even become master marketers and communicators. They will need to deepen their expertise while expanding their breadth of knowledge. Without this, the sustainability function might be reduced to keepers of scorecards, disclosures and compliance.

The story of CSOs is being constantly shaped by tides, sometimes battered by storms and yet resilient and adaptive. Those who navigate wisely will guide their organisations through turbulent seas and steer them towards meaningful and lasting value.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the publication.