CSO BACK STORY - Weinreb Group

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EXECUTIVE SUMMARY:TOP 10 FINDINGS & A CALL TO ACTIONFor years, businesses have pursuedsustainability. Perhaps not the green,social or environmental kind but certainlythe economic kind. Their shareholdershave made sure of it. Now, anotherkind of stakeholder has emerged, thatinfluences corporate behavior. They pushcorporations to recalculate the social andenvironmental consequences of doingbusiness.And some companies respond byrethinking how they strategize for thelong term. As SAP’s Chief SustainabilityOfficer Peter Graf says, “Make yourcorporate strategy a sustainable one.”Therein comes the latest executiveto join the powerful C-suite: the ChiefSustainability Officer.Lack of Clarity: Who is aChief Sustainability Officer?Further, no one has come forward tosuggest standardized guidelines on thescope and authority of the role. Wheredo the vice-presidents, directors, andmanagers rank in authority, power andleadership alongside the sustainabilitychief? How should companies choose?For example, there aren’t many roles inthe pantheons of corporate leadershipthat require the healthy dose of humilityand anti-hero capabilities that wefound CSO’s to hold. One CSO evencalls it having a “very low score on themegalomanic meter.”Or that holds responsibility for internalbehavioral and cultural change whilealso being the external representative ofthe company.Sustainability Chiefs byAnother NameThis report, then, provides acomprehensive look at the role of a ChiefSustainability Officer by charting theevolution of the 29 executives who holdthis title among US public companies andanalyzing their responsibilities.We focused on researching thosewho specifically hold the title “ChiefSustainability Officer” because weassumed that this select group wouldbe at the executive level - close to theCEO, and perhaps on an executiveteam involved with all corporate strategicdecisions – to support our efforts to gleanbest practices.We understand that the senior-mostsustainability executive might haveanother title that is equally as powerfuland influential and acknowledge thatthere are heads of sustainability that arenot on this list of 29, yet who follow all thebest practices laid out in this report.This report is aimed for not only thegrowing group of sustainability managersbut also companies who are looking forexamples, best practices and precedentsin charting their own sustainabilitystrategy.In the following chapters, you will get ataste of the role, a sense of its scope,and an understanding of its importancein today’s complex corporate structure.Independently verified, the data wascollected through publicly availabledocuments and vetted with the CSOsthemselves.A Call to ActionWhile research-based, this report alsoserves as an important call to action:For companies and sustainabilityprofessionals.As businesses, senior leadership mustrecognize that for sustainability to betruly and effectively embedded withinan organization, it must be rooted in topleadership and given the same strategicelevation as other operational functions.As for sustainability professionals, only29 companies among the roughly 7,000publicly traded companies [listed on theNYSE or NASDAQ] in the U.S. haveinstituted Chief Sustainability Officers.That’s a big opportunity for sustainabilityprofessionals.Use this report and the successes notedin these pages to make your case as asustainability manager. Don’t use theCSO term lightly. Share this report withyour colleagues and senior leadership.Question the current reporting structure,pry apart linear hierarchies, andunderstand how sustainability canbecome your company’s differentiatorover the long term.CSO Back StoryWeinreb Group
EXECUTIVE SUMMARY:TOP 10 FINDINGS & A CALL TO ACTIONKey FindingsWhile each finding represents a crucialelement of how business is conductedwhen sustainability is an integratedprocess, here are our top 10 findingsthat form the basis of the chapters thatfollow:1. Emerging Executive Role: Thereare 29 CSOs (people with that title) atpublicly traded companies in the US.2. The Secret Sauce: Chief sustainabilityofficers are business veterans whoare good at leading new initiativesand cross-functional teams, and whounderstand how to translate externalfactors into internal opportunities.3. More CSOs Appointed Each Year:This role is emerging. Linda Fisherwas the first CSO, appointed in 2004at DuPont. Next to follow was Ed Foxat Pinnacle West in 2006. Kellogg’sCSO Diane Holdorf is the first CSO tosucceed another CSO, Celeste Clarkewho is set to retire later this year.4. Knows the Business: Theseexecutives know the business. Theyhave worked their way up through theranks and were at the company foran average of 16 years before beinggiven the CSO title. Twenty-five outof the 29 were selected internally forthis role. Only four were new hires.5. Strong External Affairs Background:Of the 25 CSOs (we did not includethe four CSOs who were new hires),nine held an external facing role priorto being named CSO.6. Few Resources: With an averageof 4.2 direct reports, these CSOs runnimble operations with few resourcesbut a growing, often company-wide,team supporting their efforts7. Operational Freedom: All 29 havetheir own budget but not necessarilytheir own P&L.8. Close to the CEO: Ninety percent ofCSOs are one or two steps removedfrom the CEO, with 10 out of 29[35%] reporting directly to the CEO.A further 16 [55%] are no more thantwo degrees removed, reporting toanother C-level executive such as theCOO or CMO.9. Not Many MBAs: The group’seducational background is diverse; astheir highest degree of education, ninehold a bachelor’s degree, 17 hold amaster’s degree and three hold PhDs.Of the Master’s, there are four MBAs,five JDs, three graduates of publicpolicy, and seven science graduates.10. Involved in overall corporatedecision making: Twelve of thesurveyed CSOs sit on an executivecommittee responsible for allcorporate strategic decisions, not justsustainability.CSO Back StoryWeinreb Group
Page 1 and 2: Weinreb Group presentsCSO BACK STOR
Page 3: Foreword ByEllen WeinrebCEO, Weinre
Page 7 and 8: THE FIRST CSOThe title, Chief Susta
Page 9 and 10: Peter Graf, SAP:Business Veteran, S
Page 11 and 12: Candidacy: what makes a cso?CSO: In
Page 13 and 14: Corporate Governance And Strategy:W
Page 15 and 16: Scott Wicker, UPS:Engineer, Company
Page 17 and 18: ORGANIZATIONAL Structure:The Nuts A
Page 19 and 20: Makings Of A Successful CSOWhat mak
Page 21 and 22: Makings Of A Successful CSOmultimil
Page 23 and 24: Best Practices: The CSOBest Practic
Page 25 and 26: RANKINGS VS. TITLE: IS GREEN THE RI
Page 27 and 28: Call To Action: Sustainability Mana
Page 29 and 30: ACKNOWLEDGMENTSWe owe many thanks t
Page 31: About Weinreb GroupWeinreb Group is

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