4 min read
The corporate organogram has recently witnessed a new entrant: the Chief Sustainability Officer (CSO). Large and mid-sized corporates across sectors and lineage – from the traditional business houses to the new-age unicorns – are scrambling to introduce this role.
Full of sound and fury, signifying nothing
For all the sound and fury in media releases and annual reports, the sustainability function, in a substantial proportion of the organisations, signifies little. It is largely viewed as a public relations or brand image steroid – a passport to a ‘forward leaning’ or a larger-purpose driven positioning. In turn, this stature is leveraged for gaining a bigger voice in policy advocacy and securing a seat in prestigious government committees.
On the other hand, many Indian subsidiaries of multinational firms have the sustainability function thrust on them – a conduit for delivering the climate change or social ambitions publicly declared by the global headquarters. Consequently, the function is treated as a grin-and-bear appendage by the Indian operations.
Till such time as sustainability occupies a public relations’ equivalent mind space, its effectiveness will be limited. To unlock its full potential, sustainability must transform from being perceived as a top-up layer for brand reputation to a critical enabler of core business goals. In effect, it must build relevance.
Lessons from an alchemist
In this regard, sustainability could take a cue from the Information Technology (IT) or Technology department as it is now often known – easily the most successful and quickest function to transition from being a newbie to a permanent member of an organisation’s elite decision-making high table.
It is easy to forget that even as late as the 1990 – 2000 decade, IT was largely seen as an add-on function which lent a coolness quotient to the company. It has since catapulted up the ladder, almost overtaking age-old functions such as human resources in terms of perceived criticality for strategic business discussions. At one point, IT was merely a team which you called on to rectify glitches in the computer. Today, the Chief Technology Officer role is not just ubiquitous, but mission critical.
The lessons from IT’s meteoric rise in taking centre stage are simple: laser-focus on business objectives, contribution to financial goals and avoiding the ivory tower syndrome.
The eye of the tiger
Sustainability professionals need to adapt to their operating context. They must appreciate the difference between conceptualising and designing programmes for a development organisation vis-à-vis a sustainability function in a corporate. There is a nuanced but distinct difference in objectives.
A development organisation – be it a civil society organisation, multilateral or foundation – typically lays out the broad contours of focus, say, health or climate change. Thereafter, programmes within these loose boundaries are developed and defined based on need and potential impact. In a corporate, not only are the boundaries more concrete, but the criterion for creating programmes is different. The initiatives must be completely aligned with business strategy. Consequently, initiatives are directed at either existing or potential customers of the company; markets the company intends to enter; or ‘redeeming’ the company for issues caused by its products. For instance, a financial institution targeting low-income customers might define livelihood generation and upskilling as its area of interest.
The Chief Sustainability Officer (CSO) must not lose sight of the business objectives while developing sustainability goals for the company. This is why most of the successful CSOs are core business-people with a strong understanding and passion for sustainability. As an analogy, consider the typical CTO; she/he has now morphed from a pure technologist to someone who understands technology but, more so, the business implications of technology.
To avoid being perceived as a mere adjunct to CSR, the sustainability function must demonstrate relevance and direct contribution to the core business objectives of profit and valuation.
This is trickier than, say, for manufacturing interventions, where a change in process or the installation of new equipment often leads to immediate results. Sustainability is more akin to softer functions such as brand management or human resources, where the impact is long-term, with direct and indirect quantitative and qualitative outcomes.
A clear business-strategy driven programme helps address this challenge. The team must convince the organisation of the theoretical chain of impact and the initiatives must then actually deliver the outcomes. Studies measuring baseline and interim impact by an independent third party would speak louder as reliable evidence.
The ivory tower syndrome
Finally, the sustainability team must make a conscious effort to integrate with the larger organisation. All too often, it sits in an ivory tower of moral superiority, adding to the perception of being an exotic non-business function. The team must socialise their value, formally and informally, with their colleagues.
While the board and top management must actively assist by positioning the function as core to business objectives, the ultimate onus is on the sustainability team. To quote William Yeats, “In dreams begins responsibility”.
*Ketaki Karnik is a consultant on new growth models. Views are personal.