News: Board level hires accelerate as CSO appointments bolster ESG scores
Press Release - In a recently published report, 'big four' professional services firm PwC (a network of firms in 155 countries with over 284,000 employees) explored the expanding role of the CSO within the organisation and how these executives increasingly find their opinion valuable not only in compliance, but also HR, strategy and even finance.
The report ("Empowered Chief Sustainability Officers: The key to remaining credible and competitive") found that around 30% of the 1,640 companies analysed had a formal CSO role (while another 50% had a CSO with limited remit) and that the number of chief sustainability officer positions is growing rapidly. In fact, companies appointed about as many CSOs in 2020-21 as in the prior 8 years combined.
A global survey by PwC found that the UK ranks amongst the leading countries for putting sustainability at the heart of the boardroom - in fact, companies appointed about as many CSOs in 2020-21 as in the prior 8 years combined
Growing demand for CSOs in boardrooms
There is growing demand in UK boardrooms for chief sustainability officers with more than one in three large businesses surveyed by PwC having filled such a role. With 37% of surveyed firms having a CSO, the UK is behind only France, the US and India - but ahead of the European average of 35%.
In an international comparison, France (57%), the USA (47%) and India (44%) lead the way, with Germany (35%) just behind the UK.
Around half of the UK appointments were found to be internal hires, in line with the global trend, where 59% have been internal hires. Around one in five CSOs came to the role with a professional business and sustainability background.
Shift of importance for CSOs
The study also found that the requirements for roles focused on sustainability have also changed significantly in recent years. Such positions were once a more of a subordinate role with topics such as CSR being addressed primarily through communications.
In contrast, today's chief sustainability officers have a much more complex role. The modern CSO requires a deep understanding of all parts of the business. They need to be able to build alliances and networks, because they are in contact with almost every part of the organisation. The CSO must be able to understand the interconnectedness of all ESG issues, deal with their complexities and join the dots.
CSOs impact ESG scores
The introduction of a CSO was also shown to have a marked effect on a company's ESG scores. The study found that globally, 98% of companies rated with top grades (A+ to A-) in the Refinitiv/Bloomberg sustainability ranking had their own CSO or 'CSO light'. By contrast, 52% of the ESG laggards (grade D+ to D-) had no CSO at all.
Carl Sizer, ESG leader at PwC UK, said: "Sustainability has long passed the point of being a 'nice to have' and its importance as a strategic priority for business is evident in the growing number of Chief Sustainability Officers being appointed at the UK's biggest companies.
"Having a CSO on the board sends a strong signal to investors, customers and employees that sustainability is a key consideration in both strategic and operational planning."