CSO BACK STORY How Chief Sustainability Officers Reached the C-Suite - Weinreb Group presents
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Weinreb Group presents CSO BACK STORY How Chief Sustainability Officers Reached the C-Suite September 2011 Weinreb Group Recruiting and Consulting Specialists in Sustainability, Supply Chain, and External Affairs www.WeinrebGroup.com
Table of Contents Foreword ................................................................................................................................................................3 Executive Summary: Top 10 Findings & A CALL TO ACTION....................................................................4 Introduction: 29 Chief Sustainability Officers ..................................................................................6 The First CSO ......................................................................................................................................................7 CSO Profile: Peter Graf, SAP........................................................................................................................................................................................................9 Candidacy: What Makes a CSO?...................................................................................................................10 CSO Profile: Charlene Lake, AT&T...................................................................................................................................................................................12 Corporate Governance and Strategy: Where Does the CSO Fit?..............................................13 CSO Profile: Scott Wicker, UPS...............................................................................................................................................................................................15 Organizational Structure: The Nuts and Bolts of the CSO’s Team .............................................16 CSO Profile: Kathrin Winkler, EMC..................................................................................................................................................................................18 Makings of a Successful CSO .................................................................................................................19 CSO Profile: Linda Fisher, DuPont.......................................................................................................................................................................................22 Best Practices: The CSO ..............................................................................................................................23 Rankings vs. Title: Is Green the Right Measure? ..............................................................................25 Call to Action: COmpanies...........................................................................................................................26 Call to Action: Sustainability managers...............................................................................................27 Methodology ...................................................................................................................................................28 Acknowledgements ......................................................................................................................................29 AppenDix..............................................................................................................................................................30 CSO Back Story Weinreb Group
Foreword By
Ellen Weinreb
CEO, Weinreb Group
The person in charge of corporate I felt that companies struggle with what In the next few pages, you will see
sustainability and corporate social to call it, where to put it, and who to the first-ever data driven report of its
responsibility has evoloved, from a lead it would appreciate some real data. kind analyzing and encapsulating the
largely director level position, to vice Even a list of CSO’s does not exist to essence of a crucial and emerging
president to chief, over the last decade. date. It was my intention in CSO Back executive role: the Chief Sustainability
As the sustainability function crept Story to conduct exhaustive research to Officer. You will understand this role in its
up the corporate ladder, so has the generate 1) a CSO list, and 2) a study of entire complexity and scope, learn from
caliber of the person leading it. Thus how they arrived to their role today. examples, see firsthand the evolution
we have the title “Chief Sustainability of these chiefs, and gain valuable
To structure the research, I created
Officer,” which implies the senior-most perspectives into how organizations
specific criteria. I decided to focus on
sustainability leader in the senior-most define and implement sustainability.
U.S.-based individuals who had “Chief
possible position.
Sustainability Officer” in their title at a We owe many thanks to the people who
Two years ago, the New York Times company traded publicly in the United supported the methodology, research,
called this emerging role a “swelling States. content, editing and reviewing of CSO
of the C-suite1.” But nothing out there Back Story.
My team and I found 294.
defines or questions the role’s scope.
As an executive recruiter2 who has While the criteria for the research
watched and worked in the sustainability required the title “Chief Sustainability
field now for 15 years, I have seen Officer,” there are many sustainability
firsthand the evolution of this profession leaders who hold other titles. Because
from a discretionary cost to a strategic titles remain diverse across industries,
necessity. However, little attention has this report develops best practices for
been paid to this title – no data, no those in the senior-most role regardless
definition, no best practices. of their official title.
In 2010 I wrote an editorial for GreenBiz, My research uncovered several startling
where I questioned the definition and facts and identified a roster of best
this varying use of the term “Chief practices that the profession sorely
Sustainability Officer3.” I even made a requires.
an early attempt at the definition, which
just scratched the surface. It was then
that the idea for CSO Back Story was
born.
1
Companies Giving Green an Officer http://www.nytimes.com/2007/07/03/business/03sustain.html?pagewanted=2
2
The Weinreb Group http://weinrebgroup.com/
3
In search of the elusive CSO: http://www.GreenBiz.com/blog/2010/04/01/search-elusive-chief-sustainability-officer
4
We included Georgia Pacific even though it is not publicly traded. We felt compelled to include GP because of its sheer size and the fact that it had been public until 2005, when it was acquired by Koch
Industries for $21 Billion.
CSO Back Story Weinreb GroupEXECUTIVE SUMMARY:
TOP 10 FINDINGS & A CALL TO ACTION
For years, businesses have pursued also being the external representative of and an understanding of its importance
sustainability. Perhaps not the green, the company. in today’s complex corporate structure.
social or environmental kind but certainly Independently verified, the data was
the economic kind. Their shareholders Sustainability Chiefs by collected through publicly available
have made sure of it. Now, another Another Name documents and vetted with the CSOs
kind of stakeholder has emerged, that themselves.
influences corporate behavior. They push This report, then, provides a
corporations to recalculate the social and comprehensive look at the role of a Chief
A Call to Action
environmental consequences of doing Sustainability Officer by charting the While research-based, this report also
business. evolution of the 29 executives who hold serves as an important call to action:
And some companies respond by this title among US public companies and For companies and sustainability
rethinking how they strategize for the analyzing their responsibilities. professionals.
long term. As SAP’s Chief Sustainability We focused on researching those As businesses, senior leadership must
Officer Peter Graf says, “Make your who specifically hold the title “Chief recognize that for sustainability to be
corporate strategy a sustainable one.” Sustainability Officer” because we truly and effectively embedded within
Therein comes the latest executive assumed that this select group would an organization, it must be rooted in top
to join the powerful C-suite: the Chief be at the executive level - close to the leadership and given the same strategic
Sustainability Officer. CEO, and perhaps on an executive elevation as other operational functions.
team involved with all corporate strategic
Lack of Clarity: Who is a decisions – to support our efforts to glean As for sustainability professionals, only
Chief Sustainability Officer? best practices. 29 companies among the roughly 7,000
publicly traded companies [listed on the
Further, no one has come forward to We understand that the senior-most NYSE or NASDAQ] in the U.S. have
suggest standardized guidelines on the sustainability executive might have instituted Chief Sustainability Officers.
scope and authority of the role. Where another title that is equally as powerful That’s a big opportunity for sustainability
do the vice-presidents, directors, and and influential and acknowledge that professionals.
managers rank in authority, power and there are heads of sustainability that are
leadership alongside the sustainability not on this list of 29, yet who follow all the Use this report and the successes noted
chief? How should companies choose? best practices laid out in this report. in these pages to make your case as a
sustainability manager. Don’t use the
For example, there aren’t many roles in CSO term lightly. Share this report with
This report is aimed for not only the
the pantheons of corporate leadership your colleagues and senior leadership.
growing group of sustainability managers
that require the healthy dose of humility Question the current reporting structure,
but also companies who are looking for
and anti-hero capabilities that we pry apart linear hierarchies, and
examples, best practices and precedents
found CSO’s to hold. One CSO even understand how sustainability can
in charting their own sustainability
calls it having a “very low score on the become your company’s differentiator
strategy.
megalomanic meter.” over the long term.
Or that holds responsibility for internal In the following chapters, you will get a
behavioral and cultural change while taste of the role, a sense of its scope,
CSO Back Story Weinreb GroupEXECUTIVE SUMMARY:
TOP 10 FINDINGS & A CALL TO ACTION
4. Knows the Business: These 8. Close to the CEO: Ninety percent of
Key Findings
executives know the business. They CSOs are one or two steps removed
While each finding represents a crucial have worked their way up through the from the CEO, with 10 out of 29
element of how business is conducted ranks and were at the company for [35%] reporting directly to the CEO.
when sustainability is an integrated an average of 16 years before being A further 16 [55%] are no more than
process, here are our top 10 findings given the CSO title. Twenty-five out two degrees removed, reporting to
that form the basis of the chapters that of the 29 were selected internally for another C-level executive such as the
follow: this role. Only four were new hires. COO or CMO.
5. S
trong External Affairs Background: 9. Not Many MBAs: The group’s
1. Emerging Executive Role: There
Of the 25 CSOs (we did not include educational background is diverse; as
are 29 CSOs (people with that title) at
the four CSOs who were new hires), their highest degree of education, nine
publicly traded companies in the US.
nine held an external facing role prior hold a bachelor’s degree, 17 hold a
2. The Secret Sauce: Chief sustainability to being named CSO. master’s degree and three hold PhDs.
officers are business veterans who Of the Master’s, there are four MBAs,
6. F
ew Resources: With an average
are good at leading new initiatives five JDs, three graduates of public
of 4.2 direct reports, these CSOs run
and cross-functional teams, and who policy, and seven science graduates.
nimble operations with few resources
understand how to translate external
but a growing, often company-wide, 10. Involved in overall corporate
factors into internal opportunities.
team supporting their efforts decision making: Twelve of the
3. M
ore CSOs Appointed Each Year: surveyed CSOs sit on an executive
7. Operational Freedom: All 29 have
This role is emerging. Linda Fisher committee responsible for all
their own budget but not necessarily
was the first CSO, appointed in 2004 corporate strategic decisions, not just
their own P&L.
at DuPont. Next to follow was Ed Fox sustainability.
at Pinnacle West in 2006. Kellogg’s
CSO Diane Holdorf is the first CSO to
succeed another CSO, Celeste Clarke
who is set to retire later this year.
CSO Back Story Weinreb GroupINTRODUCING 29 CHIEF SUSTAINABILITY OFFICERS
We hereby present the current list of 29 Chief Sustainability Officers in order of company size. These CSOs are based in the United
States and work for companies publicly traded in the United States.
Chief Sustainability Officer Company CSO since Revenue ($M)6
Charlene Lake AT&T 2009 124,280
James Gowen Verizon 2009 97,354
Dave Kepler Dow 2007 57,514
Scott Wicker UPS 2011 51,486
Edwin Pinero Veolia Water North America7 2010 46,099
Bea Perez Coca-Cola 2011 35,119
Linda Fisher DuPont 2004 32,733
Bill Frerking Georgia-Pacific8 2007 27,000
Kevin Anton Alcoa 2007 21,013
Kathrin Winkler EMC 2008 17,015
Peter Graf SAP9 2009 16,517
Jerry Lynch General Mills 2010 14,797
Steve Kline PG&E 2009 14,628
Roberta Bowman Duke Energy 2008 14,272
Diane Holdorf Kellogg 2011 12,397
Dennis Treacy Smithfield Foods Inc. 2010 12,203
Roger McClendon YUM Brands 2010 11,343
John Gardner Novelis 2011 8,673
Gary Lawrence AECOM 2010 6,546
Bill Kilbride Mohawk Industries, Inc. 2009 5,319
Frank O’Brien-Bernini Owens Corning 2007 4,997
Mark Greenlaw Cognizant 2010 4,592
Cynthia Curtis CA 2010 4,429
Mike Kelley YRC Worldwide 2008 4,335
Edward Fox Pinnacle West 2006 3,524
David Clary Albemarle Corporation 2008 2,363
Paul Gilman Covanta Energy11 2008 1,582
Jack Rizzo ProLogis 2009 909
Laurie Fried West Marine 2007 623
Source: Hoovers European company traded in Europe and the United States We decided to include them on our list even though they are not currently publicly traded. They have been publicly traded for much of their history. European company traded in
6 7 8 9
Europe and the United States 10Diane is Kellogg’s second CSO. Celeste Clark took on the role in 200 and will retire this year. 11The parent company is Covanta Holdings. Majority of Covanta Holdings is Covanta Energy.
CSO Back Story Weinreb GroupTHE FIRST CSO
The title, Chief Sustainability Officer, “Few big companies operate without a
connotes different things to different CEO, COO (chief operating officer) and
people -- and across industries. With CFO (chief financial officer). Many have There has been no
industry-specific variations common, CMOs (chief marketing officer). When
companies tend to seat this role in they are joined in the C-Suite by the
one true and tested
a number of departments, including CSO, we’ll know that sustainability has path to the chief
compliance, marketing, public affairs, finally become integral to the core of sustainability officer’s
and operations. business.”
chair.
What to call the leader of this function As she had predicted, some companies
varies. The options are long and were starting to take note. In 2004,
complicated with no formal guidelines DuPont13 appointed Linda Fisher as its However, as you will see magnified
dictating a sustainability chief’s scope Chief Sustainability Officer, making her frequently in the next few pages, there
of work. Many refer to the term “chief the first CSO among America’s publicly has been no one true and tested path to
sustainability officer” as the senior-most traded companies. Today, there are 29. the chief sustainability officer’s chair.
executive in charge of a company’s Fisher, who graduated with a Bachelors
Being a leader in an emerging sector
sustainability activities. To narrow our degree in History and later went on to
brings with it several challenges, but
research, we wanted to study senior- earn an MBA and a JD, is one of only
most importantly, a lack of precedent;
most sustainability leaders who were eight women Sustainability Chiefs. An
i.e., there are no guidance or success
also at the very senior seats offered at industry veteran, Fisher, unlike most
models to follow. Fisher’s mission was
their company. We chose CSO’s who other CSOs, was an external hire. Before
clear: to tie the sustainability strategy to
formally hold this title “Chief Sustainability joining DuPont, she served as the Deputy
the company’s overall strategy.
Officer.” Administrator for the U.S. Environmental
Protection Agency (EPA). Her expertise: For Fisher, the position evolved from
In 2010, Ellen Weinreb wrote a GreenBiz
Environmental, Health and Safety. decades spent in environmental research,
article12 questioning the semantics of the
safety and policies. For PG&E’s Steve
title, CSO. She confessed that the first The past seven years have seen Fisher’s
Kline, the path involved international
time she had heard about the title -- and work constantly increase in scope. Today,
politics, economics and a Master’s in
she has been in this space for almost she is not only in charge of environmental
Diplomacy. Today, he reports directly
15 years -- was from a reporter back in health and safety but also owns DuPont’s
to the CEO and handles the company’s
2006 who was developing a story on the CSR reporting process, compliance and
federal affairs as well.
emergence of the CSO. government affairs, as well as its product
stewardship and regulatory affairs. What is clear, say Fisher, Kline and
At that time, Ellen told the reporter that
the other CSOs we interviewed, is that
the title did widely not exist, and the story
the strategic necessity of their role
was dropped. However, the position did
is increasingly becoming obvious to
exist, and has continued to evolve with
organizations.
a widely diverse palette of duties and no
defined parameters of job responsibilities
since. Writing in 2010, she ended with a
hopeful prediction:
CSO Back Story Weinreb GroupTHE FIRST CSO
CSR Rising through the Executive Ranks
Source: 2009 CSR Jobs Report: The Weinreb Group14
The diagram above shows the promotion (GRI). In fact, CSR and sustainability In the next segment, we examine the
of the sustainability function from 2004 and reporting might be one of the primary candidacy of the CSO: What have been
2009. Based on Weinreb Group’s research, factors -- if not the main one-- for this some of the commonalities in their career
we found that the number of Vice President emerging executive role. tracks; are they sustainability experts or
and Director level job postings on the rise business insiders; and is an MBA key for
from 2007 to 2009. This suggests the As UPS CSO Scott Wicker put it, “GRI this position?
promotion of sustainability and corporate is asking for such complex data and
social responsibility within the corporation. accountability, that it requires a top down
It is a natural progression for the Chief title deliberate focus on sustainability. We
to come next. were constantly hunting for data in an
uncoordinated manner. As the questions
Another driver for this sustainability role became more and more sophisticated, we
becoming more senior is the increasing realized that our governance structure had
complexity of the Global Reporting Initiative to change as well.”
14
2009 CSR Jobs Report: Weinreb Group http://weinrebgroup.com/wp-content/uploads/2008/01/CSR-Jobs-Report-2009-FINAL.pptx
CSO Back Story Weinreb GroupPeter Graf, SAP:
Business Veteran, Sustainability Ambassador
Peter Graf, 44, loves teaching, public We asked Graf to describe the agenda -- and today helps him get
speaking and technology. His father, indicators that something is going to stakeholders on the table and programs
a science teacher by profession and be “big”. “Sustainability is similar in into implementation faster.
a technophile at home, taught Graf to impact and transformational power as
“The ability of a CSO to influence and
embrace change and to appreciate the previous business megatrends such as
drive sustainability is correlated to their
value of resources. “We weren’t the most globalization or the introduction of the
ability to drive value for the company,”
well-to-do but he really added depth of internet in business. They are inevitable,
he says. To date, SAP has avoided a
thought to everything we consumed,” he irreversible and foundational. That’s
quarter of a billion dollars in costs due
says. why building sustainability into SAP
to its internal sustainability efforts. But
solutions can really change the world,”
Graf went on to a master’s degree it has also helped create the market for
he says. Also starting to become clear
in computer science, a master’s in sustainability solutions for its customers.
was the intense competition brewing in
engineering and topped it off with a PhD “SAP’s corporate mission of helping
the software sector to push sustainable
in artificial intelligence. the world run better ties perfectly
products out to the market. “As the
into sustainability. In fact, we see
With this understanding of processes market leader in enterprise software,
sustainability as our purpose,” he says.
“
and systems, today Graf leads software- we are condemned to stay ahead of the
maker SAP’s sustainability team and is curve,” Graf acknowledges. His advice for aspiring sustainability
the company’s first Chief Sustainability managers and directors: “The real
Officer. A company veteran, he started challenge is making your corporate
working at SAP in 1996, and most The real challenge strategy a sustainable one rather than
recently served as its EVP for Marketing only creating a sustainability strategy.”
is making your corporate
before being named CSO.
strategy a sustainable
While he wasn’t an external hire for the
CSO role, the title was, in fact, a new
one rather than only
venture for SAP, a strategic decision in creating a sustainability
response to market forces, according strategy.”
to Graf. “It was clear from the start
that the sustainability topic is going to -Peter Graf
be big,” he says. What followed was a
one-hour meeting with SAP’s CEO in
Graf’s ability to observe external
2008 and a six-month exploration of the
forces and leverage them into internal
opportunities around sustainability.
opportunities isn’t the only quality that
“I met [the CEO] in July 8, 2008. My new makes him an ideal CSO candidate.
role was then publicly announced on His tenure at the company was crucial
March 2, 2009.” in driving sustainability on the board’s
CSO Back Story Weinreb GroupCandidacy: what makes a cso?
While their previous titles represent a wide
Outward-facing road map
diversity of experiences and knowledge,
When we launched our research, we
here is a list of our respondents with their 36% of CSOs held an
most recent titles before CSO: external facing role
expected the path to the CSO title to
have included a major component of
Previous Title Total prior to being
Environmental, Health and Safety (EHS)
responsibilities. We were very wrong. External Affairs 5
named CSO.
Instead we found several CSOs who had
Environmental Affairs 4
previously held external facing roles.
Research 4
Of the 25 CSOs (we did not include the
four CSOs who were new hires), nine Operations 3
(36%) held an external facing role prior Marketing 3
to being named CSO. Four of those
Head of Business Unit 2
nine were environmental external affairs.
This brought us to the conclusion that the Finance 1
candidates picked for the CSO role tend
Legal 1
to have outward facing external affairs
experience rather than a strong EHS Sustainability 2
background.
Grand Total 25
With much being said in the media about
sustainability increasing as a strategic Surprisingly, only two CSO’s had
function, we also expected to see a sustainability roles before the CSO title.
majority of former SVPs and VPs of
For example, Bill Frerking, the CSO of
sustainability being promoted to CSO.
Georgia-Pacific, the only not-publicly-
Not so, say our 29 CSOs. Of course,
traded company included in this report,
there are many more VPs, directors and
was previously Chief Counsel for Building
managers of sustainability and CSR than
Products. Coca-Cola’s Bea Perez, also
CSOs, and while no less important, these
the youngest CSO at age 41, served
titles remain distanced from the authority
as the food and beverage giant’s Chief
of the C-suite. While many report into
Marketing Officer for Coca-Cola North
the C-suite, their potential remains
America before taking on the mantle of
underexploited.
sustainability.
Unsurprisingly though, we also found
that the vast majority (86%) of the
respondents were selected internally.
CSO Back Story 10 Weinreb GroupCandidacy: what makes a cso?
We broke down the Master’s degree further
CSO: Industry and Business Education: The Perfect
and found the following:
Veterans Degree for a Career in
Sustainability Degree
On average, CSOs have been with their
Science 7
respective companies for 16 years. Okay, that’s a teaser. There really remains
Moreover, 86% of them were internal no one clear degree that guarantees a
Business 5
hires. successful career path in sustainability, Law 5
As their roles evolve and adapt to a primarily because of the intense need for
Public Policy 3
fast-changing environment, the one professionals who understand business
commonality in their success is a long-term operations and strategy, as well as Communications 1
understanding of the organization. With a environmental and social complexities.
Grand Total 21
majority of the CSOs having risen through Of the 29 CSOs we surveyed, three hold
the ranks, it is a C-suite role that requires PhDs, 17 have master’s degrees as When we began our research, we expected
a deep systems grasp of the challenges their highest level of education, with the more CSOs to hold MBAs because of
specific to the company’s sector and global remaining nine holding bachelor’s degrees. the speed business schools have shown
environment. Of those with master’s degrees, we found (compared to other professional degree
a diverse group of lawyers, public and programs) in developing sustainability
UPS’ Scott Wicker offers the classic
government affairs experts, and MBAs specializations.
example. He started with the company in
1977 and has risen within the ranks by (See below).
As it turns out, however, an MBA does not
building on his engineering training with translate into the CSO title. According to our
Furthest Educational Degree
an understanding of the operations and research, business experience and industry
challenges of the freight and packaging Masters: 59% knowledge weigh much more heavily in the
sector. Today, he reports to the Chief Bachelors: 31% CSO selection than educational degree.
Operating Officer and manages the
PhD: 10% For Graf, sustainability came by way of
company’s Sustainability Report, human
rights, supply chain, compliance, as well engineering and learning how to create
as environmental sustainability. and innovate. For Kathrin Winkler, CSO
of EMC, however, the path began with
Peter Graf presents a similar track. After a bachelor’s degree in pre-med and a
joining SAP in 1996, Graf worked on a lifelong passion for systems. “I’ve always
variety of roles before being named CSO had an innate curiosity for understanding
in 2009. His strengths: An engineering connections and interdependencies. Some
background, a systems approach, and a peoples’ curiosity leads them to take things
deep understanding of SAP’s organizational apart; mine was always about putting them
structure, internal challenges and external together,” she says.
opportunities.
15
Calculated from Internal hires, not those new to the company.
CSO Back Story 11 Weinreb GroupCharlene Lake, AT&T
Collaborator, Risk Taker
Perhaps it was Charlene Lake’s years as “There was a lot of discussion around She also believes that the perfect
a journalist that taught her to take risks. where to seat the function. We chose sustainability chief must “score poorly
After graduating with a bachelor’s degree [external affairs] because of a realization on the megalomaniac meter.” Lake
in journalism and mass communications, that sustainability for us meant being explained: “there is a high degree of
Lake spent a couple of years in in tune with our social, environmental authority without control in this function
journalism before joining AT&T in 1986. and community stakeholders, and the and that means occasionally you
“
She dabbled in various communications external affairs department was already need to give credit to others who are
roles, including financial, product and in sync with that,” she says. deserving and be okay with not sharing
employee communications, before the spotlight. Your goal shouldn’t be to
settling into the external affairs function. be the headline.”
“I was asked to start a public affairs Our discipline has Lake understands that as a disciplined
program. Then I acquired the no roadmap to follow. profession, the industry is in very early
philanthropic and volunteering efforts, stages. Her expectations -- and her
We learn everything on
and went on to build out an advocacy leadership’s -- are therefore measured. “I
function for the company,” she recalls. the job. There are situa- don’t want to build a sustainability empire.
Sustainability has arguably been practice
tions when you have ab- That’s not what the company needs. The
company needs sustainability integrated
at the telecommunications behemoth for solutely no idea on what
with every function and champions
all 130 years of its existence, according to do next, you just have in every corner. For that to happen,
to Lake, but it wasn’t an orchestrated
effort. But in 2007, there was a
to figure it out” sometimes you have to step back and
take one for the team,” she says.
realization that, “our efforts needed to -Charlene Lake
become more disciplined.” Lake, along “Your ability to connect your work
with a colleague and a supportive boss, and initiatives with the success of the
got the CEO’s buy-in. Soon thereafter, Lake’s journey through the company’s company is critical. That means you
instituting sustainability as a strategic complex organizational structure [See have to go beyond the ‘what’ into the
function reached the board of directors. Page ], hasn’t been without its risks. ‘why’ of your actions. That takes a good
In fact, she credits the abilities to deal of courage, belief, confidence and
“Not only did the board receive our
“recognize when a door is open and the ability to take risks. To lead, you
proposal well, they also included a new
the courage to walk through it” as being have to be the one to take the first step,”
corporate citizenship charter in their
crucial in her success as a CSO. “Our she advises.
existing public affairs committee,” she
discipline has no roadmap to follow. We
says. Contrary to most of the companies And that’s the kind of people she prefers
learn everything on the job. There are
we researched for this report, Lake, who to hire. “Ambiguity is a really helpful trait
situations when you have absolutely no
was named Chief Sustainability Officer in this discipline.”
idea on what to do next, you just have to
in late 2007, continues to sit out AT&T’s
figure it out,” she says.
external affairs function.
CSO Back Story 12 Weinreb GroupCorporate Governance And Strategy:
Where Does The CSO Fit?
with the other functional heads of the
A Seat at the Executive
organization, i.e., finance, technology,
Table information and operation, indicating that Sustainability is finally
sustainability as a business imperative rising to the top
A necessary precursor to leading is finally becoming an integral part of
company-wide cultural change is organizational strategy. By investing
echelon of leadership.
true commitment from the top. While in and appointing executive-level
the role of a Chief Sustainability sustainability chiefs, these companies
Officer has continued to evolve, Linda are committing themselves to pursuing a
Fisher’s appointment in 2004 set off long term sustainability strategy.
set off a consistent promotion of the
sustainability profession as a whole. In Succession Planning: The
role and responsibilities for sustainability CSO is Here to Stay
executives as shown in the chart below.
Number of CSO’s Succession planning is a significant
Appointed By Year exercise for members of the C-suite to
9
ensure that these main functional areas
are never without an executive in charge.
8
Succession planning signifies the critical
7
nature of these roles, and in recent years
6
it has become an imperative to maintain
5
a trained line of executives who can
4
take on the leadership role as and when
3
needed.
2
1 This research reveals that the office
0 2004 2006 2007 2008 2009 2010
2011 of the CSO is not much different.
‘H1
With the relatively recent arrival of the
sustainability chief to the C-suite, our
Companies have had environmental
research identified only one succession
managers and compliance officers doing
story. That of Diane Holdorf at Kellogg.
a variety of functions for a long time, but
now, due to several colluding factors Holdorf, formerly VP of Environmental
and an urgency in the marketplace, Stewardship, succeeded Celeste Clark
sustainability is finally rising to the top who is set to retire later this year.
echelon of leadership.
When succession planning becomes de
With these C-suite executives all reporting rigueur for the CSO, sustainability has
one to two steps away from the CEO, truly become a company priority.
their executive powers today are on par
CSO Back Story 13 Weinreb GroupCorporate Governance And Strategy:
Where Does The CSO Fit?
“It is important that the company’s one person who was truly in charge of
Diversity of Duties: An
governance structure ensures the senior- sustainability.”
Advantage in the C-Suite most person in charge of sustainability is
“They felt the need to make it clear who
on par with the other top operational and
It is also important to note that the sheer was responsible for leading sustainability,”
functional executives,” he says, adding
diversity of a CSOs’ duties actually helps he added. Today, as CSO, Scott Wicker
that this helps not only demonstrate the
her get the other executives on the reports directly to the COO UPS.
essentially of the company’s commitment
leadership team to buy in. to sustainability top down but to the board As any sustainability professional well-
and shareholders as well. versed in GRI guidelines will admit,
In fact, 17 of the 29 CSOs have
sustainability as their sole responsibility, the process of putting a sustainability
with another 12 having dual jobs. That
CSR Reporting: report together can be a time- and labor-
second function, echoing our finding Championing Sustainability intensive project that requires a full time
regarding previous title, is largely external commitment. Therefore the CSO needs
affairs related. Additionally, five have A crucial aspect of these CSOs’ to be in a central coordinating role integral
externally facing second roles (public responsibilities is preparing annual CSR to running the entire corporation.
affairs, community affairs, external reports. With increasing complexities
affairs) and two had environmental, within the Global Reporting Initiative
health and safety responsibilities. (GRI) and the Carbon Disclosure Project
(CDP), the pressure -- and competition
AT&T’s CSO Charlene Lake, for example, -- is on for companies, big and small,
emphasized that it’s essential to “be able to make their mark on the sustainability
to recognize when a door is open and board game by reporting on their
have the courage to walk through it” when sustainability goals and challenges.
needed. Lake’s emphasis underlines
the most important responsibility of this For UPS, increasing complexities within
role: Managing several buckets of duties GRI and CDP was an important part of the
with an eye on collaboration, change decision to revise its governance structure
management, and how they lend to the to ensure there was a senior executive
company’s reputation and long term in charge of all sustainability activities,
strategy. from reporting to implementation as well
as communication. “There was a mutual
Scott Wicker expressed similar feeling that the questions were constantly
sentiments. Having risen through getting more complicated and that
UPS’ ranks and served as the VP for sustainability required more attention,”
Sustainability before taking on the chief’s Wicker informed.
role early this year, Wicker has seen
firsthand the immensity of strategic It wasn’t until Bob Stoffel--UPS’ SVP for
oversight and input the complex role can supply chain, strategy, engineering and
allow you with senior leadership and the sustainability--retired that the company
board. realized that “there actually wasn’t any
CSO Back Story 14 Weinreb GroupScott Wicker, UPS:
Engineer, Company Veteran
Scott Wicker, 50, started his career with In hindsight, though, Wicker admits that Wicker admits that while external
the United Parcel Service (UPS) in 1977, the structure was clearly transitional and pressure provided the initial motivation
also his first day of college. By 1983, experimental. to create the CSO role, the internal
when he graduated with a bachelor’s in impact was a real eye opener. “I had no
When Stoffel decided to retire early this
electrical engineering, UPS was already idea how much impact this would have
year, the reporting structure became
home. “UPS was in a major growth spurt internally on employees. The company’s
a topic of discussion yet again. “For
and they were hiring engineers to build commitment to sustainability finally sent
Stoffel, sustainability was just one of
their facilities. So off I went,” he says. the right signal to all the departments,”
many responsibilities,” says Wicker,
he says. “We were trying to conserve
Today, Wicker is UPS’ first Chief preventing him from making it a strategic
energy and operate more sustainably
Sustainability Officer and handles focus. Externally, pressure was building
for a long time. Sustainability has
“everything sustainability” for the on providing more sophisticated data
never been a hard concept at UPS. But
transportation and shipping company. and enhanced accountability. “We
“
creating an executive position seems to
At UPS, sustainability isn’t a new were constantly hunting for data in an
have really cemented our commitment
phenomenon. “Sustainability as a uncoordinated manner,” he adds.
and mission.”
function was always there at the
company but it was very uncoordinated. Of his current priorities, Wicker has this
A few people were pulling data and Sustainability has to say: “I’ve been with UPS for a long time
answering questions on an ad hoc never been a hard con- and understand how everything works.
basis,” he says. Now it’s time to use my experience and
cept at UPS. But creat- relationships to embed sustainability
In 2006, however, it was clear internally
ing an executive position into every function.”
that the firm needed to review the
sustainability governance structure. seems to have really ce-
The leadership team realized that, “We mented our commitment
needed to evolve to get better. We also
knew that we had to include all the
and mission.”
departments since sustainability affects -Scott Wicker
everyone,” he says.
What resulted was a new reporting It was time to make it “crystal clear” who
structure in 2007 which included a was responsible for leading sustainability
sustainability group with a director, vice at UPS, and instead of SVP, Wicker was
president, and five other staff. Scott named CSO. Revising their reporting
was that vice president. He reported structure, Wicker now reports directly
to Bob Stoffel, a senior vice president to the COO with one direct report and a
who held other responsibilities including staff of seven overall.
Corporate Strategy and Engineering.
CSO Back Story 15 Weinreb GroupORGANIZATIONAL Structure:
The Nuts And Bolts Of The CSO’S Team
majority run very humble operations but
The CSO in the C-Suite
with significantly overarching impact. 90% of CSOs are one
Ten CSOs report directly to the CEO. At SAP, for example, CSO Peter Graf, or two steps away
Another 16 are two steps away. who reports directly to the CEO, has
Here’s how it plays out by numbers: from the CEO in
11 direct reports but works with a cross
functional team of over a 1,000 employees reporting structure
Distance to the CEO
to achieve all his myriad duties,
Reports Directly to CEO: 35% which include diversity and inclusion,
Two Steps to the CEO: 55%
employee volunteerism, supply chain
sustainability, environmental initiatives
Three Steps to the CEO: 10%
and communications, and publishing
a formidable multimedia CSR report16.
He achieves this influence over 1000
employees through 15 division leaders
who hold dotted line reporting to Graf.
The CSO’s Team
On average, surveyed CSOs have 4.2
direct reports and an overall team of
This indicates significant progress and approximately 185 cross-functional
elevation for sustainability professionals. staffers. Because of the diversity of
Considering that the first CSO wasn’t the CSO’s responsibilities, most team
appointed till 2004 (DuPont’s Linda members are virtual and spread across
Fisher), followed by Ed Fox in 2006, it is functional areas. As sustainability grows
encouraging to see that sustainability is through the ranks at these companies,
finally becoming an integral element of the governance structures are also
the corner office. revised to accommodate a real filtering
of sustainability across the company.
Moreover, 12 of the surveyed 25
sustainability chiefs sit on the senior-most Take a look, for example, at AT&T’s
executive leadership team, responsible organizational structure: (See Page 30,
for all corporate strategic decisions, not Chart 1)
just sustainability. Lake who reports to the EVP for External
With great power comes greater and Legislative Affairs, sits with the core
responsibility, although you couldn’t say team and has seven direct reports and an
that when you look at the average CSO’s additional eight staff members assisting
team. Our research indicates that a her. In a complex structure like ours,
16
SAP’s 2010 CSR Report http://www.sap.com/about-sap/csr/index.epx
CSO Back Story 16 Weinreb GroupORGANIZATIONAL Structure:
The Nuts And Bolts Of The CSO’S Team
“Collaboration is key to integrate an average of 16 years and are well- independent budget.
sustainability into multiple company versed in company structure, operations
Wicker’s observation is spot on because
functions,” she says. and strategy, on average, they have
without financial independence, the
only been in their current role only since
For organizational structures like AT&T, sustainability function will risk being
2009.
the sustainability chief’s role often marginalized even though it sits in the
becomes one of a change manager Moreover, 12 of the 25 who responded C-suite.
instead of a project or product manager. to the surveys sit on the senior-most
As Winkler put it, the role of a CSO is one corporate decision making body
of “a catalyst.” “Your job is to catalyze responsible for all strategic decisions,
change top-down and horizontally in not just sustainability.
a way that reaches every area of the
organization. It is a significant undertaking Budget
and it takes a complex governance
structure to make it all work,” she says. Interestingly, however, all the surveyed
CSOs reported having their own operating
EMC’s structure, while visually more
budget but not all maintain independent
linear, is no less complex. Take a look:
P&Ls.
(See Page 30, Chart 2)
This is something companies -- and
The complexities of such a structure
sustainability executives -- must modify
remain as significant as AT&T’s more
for the role to be truly effective. A
parabolic setup. For a CSO to be
commitment to sustainability involves
successful, she needs to be resourceful,
giving CSOs the independence and
collaborative, and most importantly,
the corresponding power to implement
a critical systems thinker who can
their ideas with built-in accountability
objectively engage every internal
standards. After all, you cannot improve
stakeholder across functions.
what you cannot measure.
Note that both structures emphasize local
UPS is in a similar situation.
employee champions leading to functional
leaders, and a senior leadership team CSO Scott Wicker emphasized that
led by a C-suite executive. Sustainability for years the budget for his team’s
managers and executives should use activities has come from a whole
these structures as guiding points in list of departments, including PR,
revising their organizational structure communications, community relations,
around a core component of sustainability and HR. Now, he is in the process of
strategy. determining what his budget should
look like with the leadership team, and
Further, research reveals that while most
hopes to start the next fiscal year with an
CSOs have been at their companies for
CSO Back Story 17 Weinreb GroupKathrin Winkler, EMC:
Systems Thinker, Vocal Female Executive
When the CSO position was created at a woman with one exception. “If you She also had specific advice for
EMC, Kathrin Winkler recalls several are a woman in charge of sustainability, sustainability professionals who would
colleagues asking her if it was written there is a risk of it being perceived as a like to see the sustainability job elevated:
with her in mind. “I told my boss I soft program. You don’t want executives “Be patient. Sell the value of the work,
absolutely had to apply for this job,” she to think of it as just a feel-good program not just yourself. We did a really good job
says. and so women have to work harder of selling the critical need for someone
to make it clear that sustainability is a to focus strategically on sustainability
Winkler credits the role to her passion
business strategy,” she emphasizes. at EMC. They didn’t hire me only based
for sustainability and her background
on my personal value proposition. You
in working horizontally to improve A strong believer in systems thinking,
must also be able to take gratification
systems. Her passion comes from an Winkler emphasized that sustainability is
from indirect results of your work.”
innate curiosity for systems. “Some a “change management project.” “Being
people’s curiosity leads them to take a change agent and being able to work That said, she agreed that the CSO
things apart; mine has always been to cross functionally helps me get the job title does accord proper authority to
put things together,” she says, adding, done. You have to know the business her work and helps achieve more,
“
“With my kind of systems thinking and and the culture you operate in,” she including “carrying a lot more weight
curiosity there is no way I could have advises. with stakeholders, both internal and
ended up in any other field other than external.”
sustainability.”
As for other women in the sustainability
A pre-med student in college, Winkler’s
The CSO title is field, Winkler suggests demonstrating
career is anything but linear. She not just something you more assertiveness. “Take your seat at
has worked in operations, consulting, the table. It’s easy and tempting to sit
enterprise management, software
have to earn. It is the against the wall figuratively and literally
engineering as well as a short stint in role your company has when all the people around you are
marketing prior to working at EMC as a much senior. But you are the subject
Director of Product Management before
to realize it needs.” matter expert. Walk up and sit at the
assuming her current role. -Kathrin Winkler table, figuratively and literally.”
Since her appointment in 2008, Winkler In the end, much like her journey at
has emerged as an authoritative voice in Her advice for aspiring sustainability EMC, Kathrin Winkler puts the onus
a field that, at the executive leadership professionals is cautionary: “You need back on companies: “The CSO title is
level, is predominantly a man’s club. to be willing to take risks, recognize not just something you have to earn. It
that you don’t know all the answers, be is the role your company has to realize
One of only eight female CSOs in our willing to borrow ideas and be equally it needs.”
research, Winkler says the position willing to admit that you were wrong.”
brings most of the same challenges any
other influential position would pose for
CSO Back Story 18 Weinreb GroupMakings Of A Successful CSO
What makes a successful chief years of experience, a keen sense of
Leveraging External
sustainability officer? As the role observation and a nose for recognizing
develops, evolves and emerges as a challenges and being able to leverage Opportunities into Internal
necessary and crucial element of the C- them to positive action. Or as Graf puts Innovation:
suite, what qualities help a sustainability it: “The ability of a CSO to influence and
chief achieve her goals? drive sustainability is correlated to their In Graf’s case, it wasn’t his individual
ability to drive value for the company.” passion or persuasion that got senior
We put the question to all 29 CSOs
leadership thinking about sustainability.
and what emerged is the portrait of Systems thinking: While it was certainly a gut reaction in the
an accomplished professional with a
beginning that “sustainability was going
passion for sustainability and decades
For Winkler, this again is a huge to be huge,” nine months of exploration
of whetted business expertise. While
prerequisite. When the CSO role was and heavy researching went on before
the respondents didn’t have many
posted, she felt like the description was the CEO announced a focused team on
commonalities in education or career
written for her. Having had a history of sustainability.
paths, they did emphasize several key
working horizontally to improve systems
requirements: “There was intense pressure in our
with some of her previous work focusing
on sustainability, she remembered market to stay ahead of the curve,” he
Change management: says. In 2010, after SAP acquired Clear
several colleagues wondering if the job
description, had, in fact, been written for Standards, this focus accelerated. To
For EMC’s Kathrin Winkler, sustainability date, Graf’s department has created $14
her.
is all about catalyzing change. “You must billion in savings for the conglomerate.
be a great change agent and a systems “It was my passion and system oriented
thinker17. You have to be someone who brain that made sustainability the perfect It is this ability to recognize an external
does not care to be a hero but takes field for me,” she says. “It’s all about making market challenge and turn it into internal
satisfaction from being a catalyst,” she the connections and understanding the progress that can often be the crucial
says. social and environmental community we difference between a successful and
operate in,” she adds. lackadaisical sustainability strategy.
In fact, each of the five CSOs we
interviewed emphasized their role as Graf also has a deep understanding Compounding that is the fact that,
change catalysts, but it was Winkler of processes and systems. Perhaps it according to Lake, a CSO’s goals are
who perhaps stated it best: “Our role was his technological and engineering never constant. “Sustainability programs
in sustainability is to influence and background or simply a curiosity for aren’t the kind that finish,” she says.
implement behavioral and operational processes. “Managing sustainability is the “They are ongoing and can always
change. Regardless of whether you clearest leadership challenge today. For be improved with innovation being an
call the role chief sustainability officer me, it was always about making SAP’s important element. The ability to see
or something else, our function as corporate strategy a sustainable one,” programs outside the company that can
executives leading sustainability strategy he says, noting that the progress SAP be translated into sustainability efforts is
is that of change agents.” has made in recent years would have incredibly critical.”
been impossible without a clear systems
According to these chiefs, it takes
thinking coordinating the efforts.
17
Peter Senge: Systems Thinking http://www.infed.org/thinkers/senge.htm
CSO Back Story 19 Weinreb GroupMakings Of A Successful CSO
Women need to work extra hard to make important to your own success that your
Courage And The Ability to
sustainability a business strategy.” company succeeds.” Instead of personal
Take Risks: recognition, she sought progress for
Personal Satisfaction Tied to AT&T’s sustainability programs.
When you are a senior sustainability Company Progress:
executive, it’s often taken for granted that Resourcefulness:
you grew through the ranks with specialty
You must be happy being the catalyst,
and expertise on your side. While that If there is one common denominator
say the CSOs. If your purpose is to be
might be true for more functional roles, that underlines all these chiefs’ roles, it
the hero, then this job isn’t for you. As
a Chief Sustainability Officer’s path is is that they run extremely lean functions,
Charlene Lake remarked, “Attitude is
anything but straightforward. In fact, all often spread across departments and
huge in this field. You cannot do well if
the CSOs we interviewed went to great geographies. Our research, in fact
you’re looking at being in the spotlight
lengths to emphasize that their field takes reveals that on average a CSO has no
yourself.”
a ton of gumption and steel. more than four direct reports.
“Sell the value of your work, not yourself.
“You have to be able to take risks and “What becomes key to getting things
Most people in the sustainability field
recognize that you don’t know all the implemented is resourcefulness,
take gratification from the role,” advises
answers. You must be willing to borrow, knowing how to work the organizational
Winkler, who says stressing the critical
ask for advice and be equally willing to matrix to get results,” says Charlene
need for sustainability is what got her the
admit that you guessed wrong,” advises Lake. Essentially, the CSO has influence
job, not personal achievements or value.
Winkler. without power. While their task is to
“My father taught me to recycle and to catalyze change across organizations
Edwin Pinero, CSO of Veolia Water
use everything,” says SAP CSO Peter with thousands of employees and
North America, adds: “Be cognizant
Graf. His father, a teacher by profession
of business drivers and organizational
and a technophile by passion, instilled in
strategy. Realize that sustainability has to
him an acute depth of thought and taught
be integrated into the company’s DNA.”
him to question everything. “I appreciate
For both Winkler and Lake, gender the value of resources. When SAP made
presented subtle and not-so-subtle the decision to invest in a sustainability
challenges as well. While Winkler admitted chief and team, it was born from a core
that the pressure to succeed is much mission of tying our corporate mission
greater for women, she emphasized that into sustainability ‘to make the world run
gender had never slowed her down or better,’” he says.
been a factor in her career decisions. Yet,
And Graf isn’t alone. AT&T’s Lake,
she did have one piece of advice: “If you
who grew through the ranks at the
are a woman in charge of sustainability,
telecommunications firm after a
there is a risk of it being perceived as a
bachelor’s in journalism and mass
soft program. You don’t want executives
communications, has similar advice: “It’s
to think of it as just a feel-good program.
CSO Back Story 20 Weinreb GroupYou can also read
