The changing role of the Chief Sustainability Officer (CSO)

The Manufacturer’s Joe Bush speaks to three such individuals about the current landscape and how their individual roles have transitioned. Transforming rapidly from what was once a role focused on communication and ensuring compliance with reporting standards, the role of the CSO is increasingly being integrated into the core of the business in ways that fundamentally transform the company.

Describe your role and how it has changed?

Olivia Whitlam, Head of Sustainability, Siemens plc: The sustainability team has traditionally been the ones challenging the rest of the company. That’s now flipped from us questioning and trying to get people to think differently, to them coming to us and asking what to do – they get the whole sustainability issue now. It’s become a delivery role, and that’s a real step-change in terms of skills for people in the sustainability space. We’ve spent a decade trying to be changemakers, and now suddenly, we’re having to implement processes and think about strategy.

Sustainability has always been part of the discussion at our board level but the really big shift I’ve seen is that people have actually started to ask questions and incorporate it into their day jobs – these little moments where people realise that they can do something small at work which can change the world. In our case of course, they can be quite big moments, because we’re engineers, and that’s what we do. So, it’s not just the sustainability team that is now focused on this – it’s the whole company.

Nigel Davies, MD, Maltdoctor and former Director of Technical and Sustainability Muntons plc: Sustainability now reflects labour, business ethics, environment, health and safety etc. So it’s now much broader than just environmental protection. Pre-2000, it focused on energy saving. Then in the early 2000s, people were starting to concentrate on carbon mapping and understanding the supply chain. It’s expanded over the past few years to look more at international verification of sustainability standards and science-based targets.

It should be said that only around 42% of companies that have said they will set a science based target, have actually set one. So there’s still a lot of talk that is not translated into action. However, it’s becoming increasingly important. 2021 was the first year that Munton’s saw volumes switched from competitors on the basis of sustainability performance. So that’s quite a change from not knowing what on Earth a carbon footprint was 20 years ago, to it now being a strategic driver that’s attracting business.

Ben Goodare, Head of Sustainability, Renishaw: I’m the strategic leader on sustainability, working with the executive committee, and other senior management around the organisation, to try and embed it into the way we do business. It used to be very much focused on compliance and legislation. That’s still important of course, but it’s becoming the norm and is more embedded into other processes – it just happens. My role is much more around business strategy – working with the senior leadership teams.

The people I work with most are head of legal, company secretary, head of comms and our strategy director. Five years ago, however, I predominantly worked with facilities management and equivalent teams across the world. The role is certainly no longer about making sure people put things in the right bin.

How has the role of the CSO or equivalent changed within manufacturing?

OW: CSOs are now much more involved in the conversation. I’m far more likely to be on a call with a customer and their CSO – neither of us would have ever been invited before, because we’d be working in a cupboard somewhere! It’s very much a changing role – not just around what we deliver for our own companies, but how we interact with each other as part of the business.

BG: The role is becoming more significant in the opinions of customers, which is definitely changing manufacturing methodologies and strategies. We have some very important customers who are telling us that in the future they will only deal with suppliers with a net zero plan, and who report against sustainable development goals. And that definitely puts the CSO in the spotlight.

ND: Most CSOs have come from an IT background, because a lot of companies see sustainability very much as a data exercise. And I would agree – pulling data together to get a credible sustainability rating is very important. However, we’re still very much in an information exchange and engagement phase. I’m constantly explaining to people what the different scopes of a carbon footprint is, what an offset and inset is etc – all these elements where the language still needs explaining.

On the other hand, I also help people see that there are plenty of pragmatic solutions out there already – it’s not something you have to wait for. Boardrooms now see that sustainability is important for business risk avoidance, customer engagement and operational savings, but also that they don’t necessarily need to panic too much, because there’s a lot they can do now. Most boards now understand that being sustainable is the correct thing to do but, quite rightly, they also want to make sure it’s going to make them profit and de-risk the business. So, rather than talking environment, I’m having conversations around business risk, corporate responsibility, new business opportunities, customer expectation etc. It’s then that it has impact at board level, so we’re just changing the language to talk about the same thing.

Have these changes created any challenges?

OW: My biggest problem is balancing between real authenticity and depth of data, and how to tell that story. At Siemens we spend a lot of time asking ourselves whether certain scenarios could be perceived as greenwashing. There’s a balance in the CSO role of understanding how far you can go, what you can say and what you should say. It’s a really important part of the job. I would also say the requirement to have really deep insights into data is encouraging but it’s also incredibly difficult because carbon data is quite unwieldy. Trying to break data down to a level where it’s useful to a decision maker in a business unit is really hard, particularly for small sustainability teams.

BG: The challenge is that I’m no longer a compliance manager, but a business manager. Someone recently asked me what skill set you need to be a successful CSO. It’s simple; you have to be fully conversant with legal, finance, comms, compliance, manufacturing, purchasing and strategy. As long as you can do all that you’ll be fine! You have to be equipped with enough knowledge to sit with any head office function and know what you’re talking about.

As well as the technical sustainability stuff, which is difficult enough to keep up with, you are the absolute generalist as a sustainability professional, and you’ve got to be able to perform in all of those areas, understand what is being spoken about, and advise on how you embed sustainability into business processes. And, lawyers, accountants, compliance managers, comms people etc, all speak different languages. And they have different priorities and demands on their time. So, you have to be able to understand that well enough to be able to see where sustainability crosses over.

How is this perspective changing?

ND: There’s that general understanding across the supply chain that we’re not merely talking about sustainability anymore. Sustainability powers the business – it’s driven by data and profit, but it also reduces emissions. Manufacturing is the most well placed of all industries to tackle this issue because it has been focused on energy and lean technologies for many years before we even started talking about carbon. And if you think that energy could be 40% of a company’s spend, it is certainly significant.

BG: I’m spending less time persuading people to do things. And in some instances I’m struggling to keep up with demand. People understand the importance of sustainability now, but some want to run before they can walk. In some instances, I’ve actually become less of a driving force and more a restraining voice – slowing people down and making sure we know what we’re talking about, substantiate what we’re saying, and ensure we have a good plan that is credible. That was a very different scenario two years ago, where I was really having to push people to get onboard.

OW: It wasn’t necessarily something that was part of board conversations in the past, but it’s now increasingly involved at C-suite level. A broader sector of people are considering it earlier, whereas, within some manufacturers, it was a topic that was very niche a decade or so ago. In the past there’s also been certain sectors of manufacturing that felt like sustainability wasn’t their problem and it was for others to worry about. That is gradually disappearing. We’re not quite there yet but people and companies are beginning to understand that it’s everyone’s issue. There’s still a perception that sustainability either costs a lot to do (if it’s done well it should actually make you money), or that it should only be done where it is going to cut cost. That’s a really big perception shift – how do you ensure sustainability makes money? Once that happens it really takes off. And that’s probably the biggest change that’s occurred over the last ten years.

Does size of company/organisation have a direct bearing on attitudes towards sustainability?

ND: Most SMEs won’t have a CSO and many will buy in energy managers or the CSO equivalent, in much the same way as they would do a finance director. That’s a lot of the work I do through Maltdoctor – supporting companies to marshal the resources they’ve got and show them how to translate them into a sustainability agenda. There’s bound to be a difference between small and large companies, because if you’re looking at investment, the larger entities will have more money. But the interest is there from the smaller companies because they need to make margins.

If you look at our area in East Anglia, 90% of businesses have eight employees or less. So the local enterprise partnership has just set up carbon advisors (through government funds) to help explain the terms and what they all mean. Huge global companies have a grasp on sustainability and have big programmes in place. However, it should be said that smaller businesses are more agile and when they see an opportunity, they can just implement it quickly. I’ve worked with some huge companies where there are around 12 people doing my job – I don’t say that to ridicule them, they need that many in a huge global organisation. But you have to win over a lot more people in a larger business and that can take a lot of time, whereas if you’re a SME, you can just give it a go. Having said all that, I think mindset is more important than business size – it’s attitude which drives action.

BG: For SMEs, particularly with the two years we’ve just been through, more of them than usual are just in survival mode. And as an MD of a SME, you are often all the head office functions. CSO is just another hat they have to wear, which is really hard. And one of the things we’re grappling with is how we help SMEs in our supply chain to understand sustainability to be able to help us fulfil our sustainability agenda. And then take them with us on our sustainability journey.

OW: You don’t need to be a big corporate, you just need to have a will, and get on with it. I don’t buy into the theory that corporates do it well, SMEs do it poorly, or the language that says, only corporates should have to do it, because they have the bigger footprint. Everybody has to deal with this. This is sustainability – it’s not a nice to have. I’ve seen so many good examples over the years of really cool things that SMEs have done. They don’t need a job title, just somebody who wants to do it. In the grand scheme of things, it’s more about having a go. And then once you’ve done that, you learn from it, and then you have a better go.

How is technology and the application of data shaping sustainability strategies within manufacturing?

OW: I don’t know whether technology and data are shaping sustainability strategies, but they should be – there’s a huge opportunity. Look at something as simple as having smart meters on your sites with all your half hourly metering going into a system that can collate that data and enable you to visualise it via a dashboard. That data is then at your fingertips, you know when and where energy is being wasted and you’re not having to manually manage it. It’s just there, it’s constantly live and up to date – and not a year in arrears.

That’s at a really basic level with electricity meters. What happens when you do the same thing with each individual machine in your processing line, with your fleet of vehicles that are delivering goods or with your supplier data? You will find huge efficiencies you never knew existed. But, it needs a different way of thinking and a mind open to innovation. A 1.5°C world requires a much greater degree of digitalisation than a business as usual 2.5°C world. It’s not possible to get to where we need to be in 2050 without increased digitalisation, because we need these insights to make good decisions to save carbon.

ND: We obviously have an emissions target for 2035 and then net zero, so businesses are more ready to listen to the technology that’s available and incoming. The bigger issue is that I’ve lost count of how many emails I get telling me there’s yet another platform which is going to help me, and that it’s going to be the best for managing all my data. It’s made the landscape quite complex and if we’re not careful it could slow people down as they’ll have no idea which one to choose or where to start. And sometimes instead of just choosing one, they will discuss it for a year or more. My advice would be to pick one and stick with it. Don’t worry if it’s slightly less accurate than somebody else’s. The reality is that it probably won’t be vastly different to any other platform you could have chosen, so just get moving.

BG: Data is becoming more and more important. Just to comply with our annual report, we collect around 15,000 pieces of data every year. So, being able to monitor that level of granularity and understanding the energy required for manufacturing every single part or component you’re making is essential. Of course, you’ve got a finite set of resources, so you have to be pragmatic and understand where you will get the most bang for your buck.

What I’ve realised with this changing role is that it’s no longer just about carbon saving, it might be goodwill with a customer. For instance, we have free vending machines for employees which meant a lot of plastic cups – about 1.2 million a year across the UK. One day, I was helping at a work experience event and I was grilled by a 15 year old girl about why we were using plastic cups. Of course, she was 100% right, so we got rid of them. It wasn’t the most impactful thing (it saved us less than a tonne of waste a year), but it created a whole new level of conversation around sustainability and waste, and more ideas were created around our waste segregation. One of our failings in sustainability is we talk about ESG, and that’s great, but if you don’t do C (comms), you’re not going to succeed. Internal comms is essential to get people to move along this journey with you.

What will the role of the CSO look like in years to come?

OW: A CSO doesn’t really do environmental science. I might have that background, but my real focus is on how a business runs and where I can influence environmental topics. It’s just as much about understanding business or manufacturing as it is about understanding environmental issues. I’d like to think that the role will become more defined. Currently every company has a slightly different method of defining sustainability, but it feels like it’s being brought closer together.

Certainly, when I first started, it felt like everybody defined sustainability as something completely different. But with the UN Sustainable Development Goals (SDGs), being common language, I feel like companies are better able to verbalise what their CSOs do. ND: It’s important that CSOs find things that people can engage with to make sure it’s clear what you’re trying to achieve. I like the triple bottom line model – people, profit, planet.

You are trying to make more profit for the business, that’s nothing to be ashamed of. But you are also trying to be mindful of what you’re doing to the planet. And you are trying to engage your people – whether it be through recruitment or your existing workforce. When staff see that your profits have gone up, environmental credentials have improved and people are used to talking about environmental and sustainability initiatives, then I think that’s the sort of company for the future.

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Listen back to the last podcast episode in our sustainability series