Does a sustainability leader add value at board level?
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When Caitlin Leibert joined Chipotle in 2007, it took her just four years to be promoted from a marketing role to head of the restaurant chain’s sustainability operations.
The chief sustainability officer position is relatively new in boardrooms and has been driven by the rise of the environmental, social and governance (ESG) movement and the need to address sustainability and social problems.
Yet the role has been singled out by critics as a glorified marketing position aimed at burnishing a company’s ESG credentials, with some chief sustainability officers said to wield little influence over corporate policy.
Patricia Kanashiro, associate professor at the Sellinger School of Business and Management at Loyola University Maryland, conducted a study of chief sustainability officers in quoted US companies during 2006-2011. She says they often faced conflicting pressures from stakeholders, a weak regulatory environment and difficulties in building support among senior executives.
“We found that the presence of a CSO is not associated with better environmental performance, suggesting that in some cases the CSO is hired solely as a window dressing or greenwashing,” she says.
Ms Leibert, who was 26 when she became Chipotle’s first head of sustainability, feels she is making a tangible difference to sustainability in what she calls her “dream job”. She is responsible for implementing Chipotle’s sustainability strategy across 2,500 restaurants worldwide, including programmes to reduce waste and better manage energy and water use.
She has also led the “Cultivating a Better World” initiative, a programme aimed at assisting farmers to develop financially and environmentally sustainable farms that Chipotle can weave into its supply chain.
“My life’s work, my actual job, is to fiercely and strategically create positive, sustainable change at scale,” says Ms Leibert, who completed a masters in sustainability leadership in 2015. “Supporting the next generation of farmers is equally as critical as it is impactful.”
Chief sustainability officer roles began appearing in the 2000s. DuPont, the US chemicals company, became one of the first big corporations to appoint a sustainability chief in 2004 — Linda Fisher, who joined from the US Environmental Protection Agency.
In 2011, some 12 per cent of Fortune 1000 companies reported having a C-suite executive dedicated to sustainability. Today, most Fortune 1000 businesses have a sustainability-focused executive, with Visa, GM and Boeing among those making inaugural chief sustainability officer appointments this year.
However, academic research has shown that companies with higher pollution emissions often also have chief sustainability officers, and that appointing them made little difference to companies that were already performing poorly on emissions.
Andrea Romi, an accounting professor at Texas Tech University and a CSO researcher, says that a number of companies, including some in the extractive industries, were hiring chief sustainability officers with modest influence from non-specialist backgrounds such as public relations or marketing.
“If [a CSO’s] expertise tends to not be in something substantial like hardcore science and they don’t have experience in sustainability, I can’t imagine what your motivation would be for hiring other than tokenism,” she says. “But over the past few years, the number of qualified people with senior positions was rising. They are still not usually one of the top five executives . . . but I believe that will come.”
More than one-third of US institutional investors want to hear from a company’s head of ESG on sustainability topics including supply chain risk, employee health and safety and the impact of climate risk, according to a recent survey by consultancy Edelman.
As social challenges increasingly come under the spotlight and ESG funds soar, financially minded chief sustainability officers who can incorporate ESG approaches across different departments are likely to become more prominent.
Claudia Toussaint, chief sustainability officer of Xylem, was part of the team arranging the US water provider’s $1bn green bond offering this year. She says chief sustainability officers with financial expertise can be a valuable addition to executive teams.
Ms Toussaint, a lawyer with 13 years of general counsel experience, says her position at Xylem demands financial expertise that chief sustainability officers elsewhere may lack. She also believes that the CSO role will eventually become obsolete — what she calls “biodegradable” — as ESG performance indicators are built into other executive positions.
Lindsay Hooper, executive director of education at the University of Cambridge Institute for Sustainability Leadership, says the appointment of a chief sustainability officer should form just one part of a company’s sustainability agenda.
“There is a growing need for boards to lead and constructively challenge the executive team to take a strategic approach to sustainability,” she says. “This requires not just dependence on a CSO, but a board that is able to guide a strategic approach that proactively develops solutions to difficult issues such as navigating the economics of transition to a sustainable future.”
*This story has been amended to clarify Caitlin Leibert’s job title as head of sustainability at Chipotle
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