Sustainability in the C-Suite – Yes or No?

What role does the top floor play in improving companies’ environmental performance? Clare Feeney kicks off a series of three articles.

The 1954 film ‘Executive Suite’ referred to the floor space occupied by a company president, well known for his "one-man" governance of the firm. His untimely death triggers a round of struggles at the top … and the plot follows the machinations of would-be ascendants occupying the next level of management.

The term ‘executive suite’ still refers to this prime office space, with the ‘C-suite’ referring to its denizens – today’s standard triumvirate being the CEO, CFO and COO. These are the guys – and it’s usually men – who set a company’s strategy, coordinate activities and allocate resources across business units.

However, in the past 20 years these C-somethings have steadily proliferated and now encompass a whole range of functional roles. A recent Harvard Business Review paper listed seven C-level jobs including chiefs of information, marketing, finance, supply chain management, and human resources as well as general counsel and, head of the pack, the CEO. A cursory Google search reveals a whole lot more - including such oddities as “chief business architecture officer” and the truly silly “chief cleaning officer”.

So what criteria qualify one for entry into this august group? What strategic and operational skills are vital if the C-suite is to deliver and improve both short and long-term performance up in a world characterised by increasing financial, economic, political and environmental uncertainty?

Right now, 60 per cent of companies in the Global 2000 are replacing their C-suiters – compared with a normal quarterly turnover of just 10-20 per cent with many new recruits boasting novel leadership titles. Clearly these new C-suite positions are being created to fill a perceived gap in the skill set round the top table. It seems that in an uncertain world, representation is required from all areas of strategic and operational risk/opportunity.

Among the burgeoning new C-suite titles is another emerging group – chief visionary officer, chief strategy officer, chief innovation office - and an expanding group of chief sustainability officers, CSOs.

While the CEO is often characterized as the one person who sees how everything in the business fits together, there is growing evidence that sustainability best reveals such an overview. That’s because it can help open the eyes of people from top floor to shop floor as to how the whole business operates - and in ways that make people learn new things.

This is backed by a growing body of research suggesting that “sustainability” is seen as key to a firm’s future. A recent survey by Boston Consulting Group showed most Fortune 500 companies have hired CSOs, with over 60 per cent agreeing that sustainability is increasingly important for competitiveness and that they are committing more management time and investment to it.

Global management company Accenture has embarked on a year-long research programme on sustainable organisations, to invite debate on the role of the major C-suite functions (it has identified 10) and how each can help implement sustainability.

The underlying question is whether sustainability is better delivered from the C-suite via a dedicated CSO or by embedding sustainability into everything.

Clearly Accenture thinks that sustainability’s elevation to the C-suite indicates the need for an organisation-wide mandate. This agrees with research showing that strong executive leadership is crucial for firms looking to improve their sustainability performance. Clearly, being able to deliver performance in a core business area is the key to the door of the C-suite.

As to what is core – I’ve identified a few questions that could help.

  • Is it a core business strategic issue?
  • Does it save costs?
  • Does it increase profits?
  • Does it create business value?
  • Does it help us manage risk?
  • Does it improve our legal compliance?
  • Does it generate competitive advantage?
  • Will it improve the longevity of our business?
  • Will it allow our operations and supply chain to demonstrate corporate responsibility in social, environmental and other ethical areas?
  • Does it affect our relationship and reputation management?

So – what do you think?

Should sustainability join the C-suite?