In November 2020, His Royal Highness (HRH) The Prince of Wales called for all large businesses around the world to appoint a chief sustainability officer (CSO). He argued that the CSO “is fast becoming one of the most important and influential roles in the corporate world and is increasingly central to market competitiveness.” This is because the CSO has the power to make sure that sustainability underpins business strategy, decision-making, procurement, supply chains, and customer engagement.
The call couldn’t be more timely. Failure to arrest global warming would be an environmental, social, and economic catastrophe as well as an existential threat to human wellbeing. We’re at the tipping point, and now is the time for us all to collectively seize the moment and take action.
The prince issued his call at the inaugural meeting of the S30, an international group of C-suite sustainability leaders, formed as part of his Sustainable Markets Initiative. I co-chair this group, which aims to use its collective expertise, influence, and power to answer the most challenging business questions facing our planet today.
Hopefully this rallying call will encourage global businesses to appoint their own CSOs as they mobilize to reverse climate change. But how can a newly appointed CSO make an impact from the word “go?” With seven months under my belt as the EY global vice chair for sustainability, here are my five top recommendations for other CSOs who are just starting out.
1. Set clear targets for what you’ll achieve by when
Unless we take decisive action now, there is a strong risk we won’t meet the Paris Agreement objective to limit this century’s global temperature increase to 1.5 degrees above preindustrial levels.
By setting clear, ambitious sustainability targets for their organizations, CSOs can drive real change. Targets enable companies to hold themselves to account—and empower stakeholders to hold them to account, too.
Each target must be backed up by a strong businesses case. This should include a consideration of the costs of the changes that will be needed, as well as the potential revenue benefits. It is only then that businesses can adopt an approach that is truly value-led. At EY, we recently went public with an ambition to become carbon negative from 2021 and net zero from 2025. These targets are backed up by a sound business case and will allow the EY organization to both protect and create value from sustainability and, from this, invest further in becoming even more sustainable.
2. Use metrics and report on your progress
It is one thing to set sustainability targets, but your organization is only likely to deliver on those targets if it measures and reports on its progress against them.
While a plethora of frameworks exist for measuring and reporting on sustainable value creation, it can be difficult to know which framework your own organization should choose. A good starting point is the World Economic Forum’s Stakeholder Capitalism Metrics, which have the backing of the WEF’s International Business Council, a group of CEOs of 120 of the world’s largest private companies. The planet is one of the four key pillars of the metrics, along with the principles of governance, people, and prosperity—and they have been selected for their universality across industries and business models.
3. Bring your people and leaders with you
An ambitious sustainability strategy will inevitably create some tensions within the business because it will force people to change. Perhaps the sales team will have to continue to rely less on business travel and more on video conferencing meetings in future. Maybe procurement will need to review supply chains so the organization sources more components from local suppliers. These changes will not just impact on processes, they may also impact on costs—for better or worse.
To bring your people with you on the sustainability journey, it is therefore essential to sell the story. Yes, it might mean making changes in the short term, but in the long term it means building a better, more sustainable business—a business that other people will want to work for, buy from, sell to, and invest in; the kind of business that will generate greater value for all its stakeholders while helping save the planet. How can there be a better story to tell than that?
4. See sustainability as an opportunity
Sustainability should not be viewed simply as a compliance exercise or as corporate philanthropy. It also is a huge opportunity for business growth. As the EY Future Consumer Index highlights, nearly a fifth (17%) of consumers are willing to pay a premium for high-quality, ethically sourced goods. New government regulations are also likely to stimulate demand for ethical products and services in the future. This means your organization must put sustainability right at the heart of innovation and value-creation. It needs to understand how it can create products that will appeal to customers who prize sustainability, by anticipating evolving market and regulatory trends.
5. Develop strong alliances within a like-minded ecosystem
None of us can solve the climate crisis on our own. Collaboration is vital. We will only make real progress only if we share experiences, ideas, learnings, and best practices with other organizations—including our customers, partners, suppliers, and even competitors. The Prince of Wales recently launched his Terra Carta initiative, a roadmap that will help businesses work together to move toward a more sustainable future. We’ve also been inspired by ambitious goals set by other companies, including Microsoft, which has pledged to be net zero by 2030.
The CSO is still a recent appointment for many organizations—my own included. But I believe that CSOs have a huge opportunity to shape business strategy and both protect and create value. By working closely with their peers in the C-suite, as well as the wider workforce, they can help to shape businesses that truly deliver long-term returns for all stakeholders while helping protect the planet for generations to come.
Steve Varley, Global Vice Chair Sustainability, EY