Eric Block On Responsible Branding

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By Lynelle Cameron & Mark Spears from Greenbiz.com • Reposted: April 5, 2023

Companies large and small are setting up internal sustainability functions. How should these teams be structured and who is accountable at the executive level varies widely depending on the company, the size, the industry, the strategy and the leadership team. What does this mean for your company and how should you set up a sustainability team to be most successful? Given that sustainability is increasingly tied directly to a company’s success, should the chief sustainability officer (CSO) necessarily report into the CEO? 

We recently posed this question to the members of Sustainability Veterans, a group of professionals who have held senior positions leading corporate sustainability teams at global brands. The group comes together regularly to leverage their collective intellectual, experiential and social capital in service of helping the next generation of sustainability leaders be successful. Collectively, the group has set up, reorganized and restructured sustainability teams at brands as diverse as Autodesk, Dell, Herman Miller and Nike. 

“CSO and innovation leader roles are combined at Dupont,” says Dawn Rittenhouse, formerly the director of sustainable development there for 20 years. “I spent much of my sustainability career reporting up through the operations function. Transitioning the focus from ‘doing less bad’ to thinking about how the company is ‘investing for the future’ was a refreshing transition and really allowed us to drive changes that would impact the company for decades to come.”

Nike was similar, shares Sarah Severn, who spent over two decades in senior sustainability roles at the apparel and footwear giant. “Until recently, the CSO had a dual reporting structure, to the president of innovation and to the CEO. The sustainability team evolved over the years as did its reporting structure.”

At EMC, the CSO reports into the general counsel. Kathrin Winkler, former CSO for EMC, co-founder of Sustainability Veterans and now an editor at large for GreenBiz, shared the following: “At EMC, I reported into the GC. We were yin and yang, which ensured my arguments were well-reasoned and honed. He taught me a ton about governance, risk and wielding influence. His remit — and therefore mine — was the entire business, which he knew cold, and he had the ear and trust of the CEO and board. For a well-established company, I’d advocate reporting to the general counsel or CFO, who would have equivalent attributes.” 

Ellen Weinreb, another co-founder of Sustainability Veterans, referenced research her firm published this month titled the 2023 Weinreb Group CSO Report. It found that roughly a third of CSOs report to the CEO and a third report to the chief operating officer or head of strategy. This finding held true in CSO surveys Weinreb Group ran in both 2011 and 2023.

CMO or CFO?

Being aligned with marketing is what has worked at other companies. Trisa Thompson, a lawyer and former chief responsibility officer at Dell Technologies, said, “My team at Dell reported into the chief marketing officer. It was very helpful because I had dedicated marketing and communications support — something we really needed to get our message out.” She went on to explain that “the CSO should regularly and necessarily interact with all of the CxOs on the executive team.”

“One strong option would be to report to the CFO since they typically own strategy and financial reporting, which enables a deeper integration with sustainability,” explains Mark Spears, a former sustainability director at The Walt Disney Company. “Integrating non-financial strategy and reporting with its financial counterpart encourages a balance of business performance, risk management and meaningful and measurable sustainability impact.” 

At Autodesk, sustainability and impact reporting shifted from the CMO to the CFO, according to Lynelle Cameron, the company’s former VP of sustainability, now an ESG adviser to regenerative companies. “The move from CMO to CFO partly reflected a natural evolution as sustainability became more tightly integrated with investor relations and the performance of all aspects of the business. At the end of the day, the key factor for us was identifying the executive who had significant clout at the executive table and would be most effective driving it forward with the CEO and the board.” 

“Good relationships across the executive team are what’s essential, regardless of where the sustainability leader reports,” explains Mark F. Buckley, former VP of sustainability at Staples and founder of One Boat Collaborative. “The final 16 years of my sustainability career at Staples, I reported into senior leaders who reported directly to the CEO and chairman, which provided good support and visibility. As a result, I had good working relationships with all functional leaders.” 

Bart Alexander, former chief corporate responsibility officer at Molson Coors, agrees that having a broad spectrum of high-level relationships is key. “The primary role of the CSO is to foster sustainable change across the enterprise, in all functions and geographies. To do so, they must have excellent and trusting relationships with senior leaders throughout the organization, as well as with key stakeholders. Engagement is fostered when staffing is detailed from the business units, since that is where the real work happens.”

Frank O’Brien-Bernini, former CSO at Owens Corning, has a slightly different perspective. CSOs, he says, should report to the executive with the most influence. “The CSO should report to the person within the company who can most directly advance the sustainability agenda being pursued, leaving no ‘go-between’ executive. At Owens Corning, the CSO reports directly to the CEO, which is consistent with the depth and breadth of the sustainability agenda, cutting across and demanding progress from all functions. In most companies, all the C-suite functions come together at the CEO, so the CSO becomes a unique and key partner in sharing and operating from that holistic perspective.”

In the end, there’s no one right answer. For example, another finding from the Weinreb Group report was that the remaining third of CSOs report all over the place: ESG; diversity; HR, supply chain; R&D; investor relations. 

Opinions, too, are varied. Alexander points out, “The formal reporting is not so important as long as the CSO has regular access to and support from the CEO and the corporate board.” Thompson believes, “In the future, the CSO should report into the CEO, as the role is becoming increasingly strategic to the entire company and to your customers.” For early-stage companies, says Winkler, “the CSO should report to the CEO.”

What matters most is access to and direct communication with the CEO and the board. “Having experienced an ever-evolving reporting structure, it is vital accountability ultimately resides with the CEO,” explains Spears. Severn agrees: “Given the broad nature of ESG requirements, I would always advocate for the CSO to have a direct line to the CEO because it avoids potential conflicts of interest if situated within other departments.” 

Cecily Joseph, former VP of corporate responsibility at Symantec, put it this way: “I don’t think it matters where the CSO/sustainability team sits in the company. Reporting into functions such as legal, marketing, finance or directly into the CEO can all be impactful. What matters is that the person overseeing the sustainability function has access to the C-suite, CEO and board, and can directly influence the company’s strategy.”

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