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04 November 2021 | Press Release
As leaders at COP26 tackle climate change, a new report sheds light on how companies can organize themselves to integrate sustainability into their businesses. Produced by The Conference Board, the report covers issues including where sustainability sits within companies, the size of sustainability departments, and key priorities of sustainability teams.
According to the report, there is no “right” answer for where sustainability sits in an organization. While having a chief sustainability officer who reports to the CEO can galvanize a company’s efforts, reporting to the CEO is less important than access to the C-suite and board. A company’s sustainability leader needs strong strategic planning and persuasion skills; a core team that can carry out certain essential functions; strong relationships with areas such as finance, strategy, law, human resources, and corporate communications; and clear governance structures that can help integrate sustainability into the business.
The report’s insights are derived from a survey of more than 100 sustainability executives, in-depth interviews, and a roundtable discussion with more than 100 sustainability executives. Additional insights include:
In the US, 19 percent of sustainability heads report to the CEO, compared to about 40 percent in Europe:
US sustainability leaders report to: the CEO (19 percent); followed by the Chief Marketing Officer (15 percent); General Counsel (10 percent); or heads of Strategy, Operations, & Technology (6 percent each).
US teams most often have 2-5 full-time employees, and European teams most often have 6-10:
US companies: The plurality (42 percent) has teams composed of 2-5 full-time employees.
European companies: The plurality (33 percent) has teams composed of 6-10 full-time employees.
Compared to European companies, twice as many US companies have one-person teams:
US companies: 25 percent have central sustainability teams composed of one individual.
European companies: 12 percent have one-person teams.
“Sustainability executives are not looking to build an empire,” said Thomas Singer, Principal Researcher at The Conference Board Governance & Sustainability Center and author of the report. “Most sustainability executives who lead small teams, for example, think having a team of six to 10 would help them accomplish what they need. Indeed, some heads of sustainability who oversee large teams see the day when their corporate teams may decrease in size, due to sustainability being fully embedded in their company’s DNA.”
“Boards are increasingly accountable for the ESG efforts of their companies—from climate change risks to diversity to supply chain resilience and more. So, now more than ever, boards can benefit by having direct access to their companies’ sustainability leaders,” said Paul Washington, Executive Director of The Conference Board Governance & Sustainability Center. “And sustainability leaders, too, stand to benefit immensely by having direct exposure to their boards, including by getting a better understanding of the overarching priorities of their organizations.”
63 percent of larger companies ($10 billion and over) use the hub-and-spoke model: Under this approach, the sustainability team provides overall guidance, while most of the responsibility for implementing initiatives rests within the business units.
For larger companies, the model can help in broadening the scope of sustainability efforts, integrating sustainability into the business, and identifying sustainability-related business opportunities.
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About The Conference Board Governance & Sustainability Center
The Conference Board Governance & Sustainability Center serves as a resource, platform, and partner to help Member companies address their priorities in corporate governance, sustainability, and citizenship.
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Joseph DiBlasi
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