From Sustainability to Business Strategy: How the Role of the Chief Sustainability Officer is Evolving to Shape Business Strategies
LONDON, Oct. 18, 2023 /PRNewswire/ -- In a first-of-its-kind, comprehensive analysis of an essential business role, the Leonardo Centre on Business for Society at Imperial College Business School, in partnership with Emeritus, the global leader in making high-quality education accessible and affordable, have released the findings of an analysis on the evolving role of the Chief Sustainability Officer. The report: From Sustainability to Business Strategy: How the Role of the Chief Sustainability Officer is Evolving to Shape Business Strategies, introduces a comprehensive model of how companies evolve toward the integration of sustainability behavior in business strategy.
The role of Chief Sustainability Officer was once a specialized communication role but has become in the most advanced companies a position that shapes business strategy. Sustainability initiatives not only drive social and environmental change, but companies that actively practice a sustainable approach gain a competitive advantage that can boost profitability.
The result of a collaboration between online learning pioneer Emeritus and the Leonardo Centre on Business for Society, the report examines the ways that the Chief Sustainability Officer has grown to take on new importance in companies across sectors.
The report is based on interviews with 37 sustainability executives from large multinational companies. In addition, the report uses the Leonardo Centre's unique digital database, the GOLDEN Sustainability Dataset, which tracks over 900,000 sustainability initiatives extracted from over 45,000 corporate sustainability reports published by over 9,000 companies in a span of 20 years.
"CSOs play essential roles at the world's most important and progressive companies," said Charlie Schilling, President Enterprise Business and Workforce Development at Emeritus. "Our work with the Leonardo Centre on this report provides insight, inspiration, and a roadmap for how organizations worldwide can effectively deploy CSOs as shapers of business strategy as companies accomplish their sustainability objectives."
"Companies are learning to view environmental and social impact as an opportunity to develop innovation, differentiation, cooperation and sustainable growth strategies," said Maurizo Zollo, Professor of Strategy and Sustainability at Imperial College Business School and Scientific Director of the Leonardo Centre on Business for Society. "This is a step change from the standard notions of CSR as stakeholder-oriented communication and regulatory compliance."
Key insights gleaned from the findings include:
- HIERARCHY MATTERS. Sustainability is emerging as a key element of business strategy. It influences the way companies compete, innovate, grow and collaborate with others in their eco-systems, including their rivals. The power of the role to influence business strategies within a company depends largely on where it falls in the organizational hierarchy. The sustainability function is being progressively integrated with core functions of the organization or directly working with the CEO to shape business strategy and create an integrated narrative with key stakeholders.
- THE CSO IS IN DEMAND. Most large companies are experiencing a rapidly evolving generational change, where sustainability-related competencies are sought after. CSOs and their teams are uniquely positioned to capitalize on this growing recognition.
- UNDERSTANDING BUSINESS IMPACT MATURITY. The report introduces an innovative model to assess business impact maturity, defined as the degree to which sustainability drives business strategy. The model examines 10 key factors, including the strategic value of sustainability initiatives (e.g. innovations are more valuable than donations), each evaluated along 5 levels of maturity.
- IMPACT MATURITY MATTERS FOR SHAREHOLDER RETURNS. A portfolio of S&P 500 companies that overweight high-maturity companies, those investing in sustainability-driven innovations more than their peers, overperform in terms of shareholder returns (+92% returns over 12 years compared to the S&P 500 index). The same portfolio overweighting less mature companies (higher percentage of donations and communication activities than average) underperforms the index by 70% over the same period. This demonstrates the importance of the evolution of the CSO as a key stakeholder in strategic decisions, not only for environmental and social impact, but also for shareholder returns.
Find the full report here.
Emeritus is committed to teaching the skills of the future by making high-quality education accessible and affordable to individuals, companies, and governments around the world. It does this by collaborating with more than 70 top-tier universities across the United States, Europe, Latin America, Southeast Asia, India, and China. Emeritus' online courses, bootcamps, degree programs, professional certificates, and senior executive programs help individuals learn new skills and transform their lives, companies, and organizations. Its unique model of state-of-the-art technology, curriculum innovation, and hands-on instruction from senior faculty, mentors, and coaches has educated more than 300,000 individuals across 80+ countries. Emeritus was recently awarded the "Online Education Solution of the Year" by 2022 EdTech Breakthrough Awards. For more information, please visit https://emeritus.org/.
About the Leonardo Centre on Business for Society, Imperial College Business School
The Leonardo Centre on Business for Society (Leonardo Centre) is a Centre of Excellence that envisions a society where companies pursue profit for societal impact. We believe that environmental destruction and social and economic injustice are not inevitable consequences of economic growth. We bring together scholars who span engineering, social and medical science with businesses and policymakers to co-create solutions for a more sustainable future. A unique aspect of our work is the GOLDEN for Impact dataset – an AI based dataset which features more than 900,000 corporate sustainability initiatives from over 9,000 companies, from the past 20 years. By combining the expertise and insight brought through collaboration with data-driven quantitative assessment of the financial, environmental, and social impacts of business actions we aim to build a truly sustainable business future.