Chief Sustainability Officers Gaining in Influence, Still Lack Board Access: PwC’s Strategy&
A new study released by PwC’s global strategy consulting business Strategy& revealed that companies are increasingly turning to Chief Sustainability Officers (CSOs) to spearhead and manage the ESG aspects of their businesses. The study, “Empowered Chief Sustainability Officers” indicated that while the role of the CSO is rapidly evolving and expanding, many CSOs still lack the necessary authority or scope of responsibilities to sufficiently influence their company’s sustainability strategy.
For the report, Strategy& researched the role of the CSO at 1,640 listed companies, including reviews of CSO appointments, broad-based company research, and detailed executive interviews, focusing primarily on the largest companies by market capitalization, across 62 countries globally.
The study found that 30% of the companies had a formal and active CSO role, with appointments ramping significantly in recent years. Strategy& identified 68 CSO appointments in 2021, more than in the 5 prior years combined.
While approximately 80% of the companies studied had some form of CSO role, Strategy& noted that around half of the CSOs had a limited mandate, either sitting more than two hierarchy levels below the C-suite and lacking sufficient board access, or had little influence on core business or strategy, focused instead on corporate social responsibility or HSE. The study classified these as “CSO light.”
The study did find that this situation is improving, however, with CSOs gaining in influence and responsibility. According to the report, 28% of 2021 CSO appointments were part of the C-Suite, compared to only 9% in 2016. This change comes as the role of the CSO is evolving, as companies increasingly look to embed sustainability into their strategy and operations, and as regulatory and investor needs for ESG reporting mature.
The presence of a CSO appears to have a significant influence on sustainability performance, according to the report, which found that of the A-rated ESG scored companies (based on Refinitiv ESG ratings), 49% had an active CSO, compared to only 16% of D-rated companies.
In the report, Strategy& wrote:
“While not a “silver bullet” in itself, a well-established CSO can make a real impact connecting the dots on ESG and supercharging the sustainability transformation. The role of the CSO will undoubtedly grow as organizations continue to put ESG at the heart of their business.”
Click here to access the Strategy& report.