the chief sustainability officer role in corporations

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Going Green? Hudson Gain Studies The Chief Sustainability Officer Role In Corporations DON’T HIRE A SUSTAINABILITY CHIEF UNTIL YOU READ THIS STUDY! OCTOBER 15, 2008

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An interview-based research study on the Chief Sustainability Officer Role in Corporations, including whether to hire from the outside or promote from the inside, functional background and criteria for selection, typical responsibilities, common challenges. Co-authored by Victoria Zelin and Roger Thorne.

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Page 1: The Chief Sustainability Officer Role In Corporations

Going Green?

Hudson Gain Studies The Chief Sustainability Officer Role In Corporations

DON’T HIRE A SUSTAINABILITY CHIEFUNTIL YOU READ THIS STUDY!

OCTOBER 15, 2008

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Healthy organizations have always looked for ways to reduce costs in the near

term, appeal to customers and employees, and ensure the long term viability of the organization.

The current trend toward sustainability in organizations is exciting because it supports all of these

business objectives.

Hudson Gain Corporation, the leadership solutions firm, has conducted a comprehensive study on

sustainability and leadership. Specifically we reviewed the role of the head of sustainability in organi-

zations. The study includes research on over 1200 companies, and leverages interviews with over 60

sustainability executives. This document provides insight on the key responsibilities and challenges

of the sustainability boss, as well as guidance for creating and filling the role. We hope this study will

prove useful to any organization seeking to fill the role of chief sustainability officer, whether creating

the role for the first time or upgrading the function, or whether filling the role with an internal candi-

date or conducting an external search for the right sustainability leader.

Page 3: The Chief Sustainability Officer Role In Corporations

Table of Contents

Introduction ...................................................................................................................................................................... 4

Scope And Methodology .................................................................................................................................................. 7

Conclusions ...................................................................................................................................................................... 9

Case Study........................................................................................................................................................................ 11

Requirements For The Corporate Head Of Sustainability Job .................................................................................... 13

Challenges Of Sitting CSOs............................................................................................................................................ 23

Top Sustainability Leadership – Companies And People ............................................................................................25

Looking Ahead To Sustainability 1.0 And 2.0 ................................................................................................................28

Best Quotes From Our Interviews ..................................................................................................................................31

Credits ..............................................................................................................................................................................33

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Introduction

The coming decades will prove to be a trying and excit-

ing journey where organizations and their leaders will

find solutions to capture elusive energy sources, find

enough water for growing popu-

lations without polluting too

much of it, slow global climate

change, and preserve the

ecosystem that supports all

forms of life, including cus-

tomers and companies. Now is

the time for boards, CEOs, CFOs and HR executives to

ask, “Does my organization have the right sustainabili-

ty role to win this challenge? Do we have the right

person in this critical role?”

In this study we provide a definition of sustainability,

“must have” criteria for the top sustainability job in

organizations who are selecting someone to lead the

sustainability function, a list of the top three sustainabil-

ity bosses, and other great findings and quotes from our

research of over 1200 organiza-

tions, and our interviews with

over 60 sustainability execu-

tives.

For the purposes of this study,

we sometimes refer to an orga-

nization’s top role in sustainability as the “Chief

Sustainability Officer” or as the “CSO.” In practice, the

actual job titles vary greatly and include terms such as

Green, Sustainability, Environment, Community and

Social Responsibility. In other cases the role was a sub-

4

Now is the time for boards, CEOs,

CFOs and HR executives to ask,

“Does my organization have the

right sustainability role to win this

challenge?”

Page 5: The Chief Sustainability Officer Role In Corporations

set of a leadership role in another function such as

Operations or Communications.

Sustainability: What Is It?

When companies and decision makers start to look

at sustainability as an issue, they are bombarded

with reams of data about green, alternative energy,

recycling, carbon footprint, responsibility, and the

seemingly endless variations on the definition of

“sustainability.” You might find many debates about

the motives of big corporations that publicize their

sustainability programs, versus the argument that

the largest organizations are the ones who stand to

make the biggest impact for the planet. If you find all

of this daunting, we have encouraging news for you.

There are simple long-standing principles that organ-

izations use to measure and improve their business

through sustainable business practices. The philoso-

phies behind many of the current organizational

sustainability practices can be traced back to the

Brundtland Commission (World Commission on

Environment and Development, 1987), which defines

sustainability as “meeting the needs of the present

without compromising the ability of future genera-

tions to meet their own needs.”

Our study focused on the voice of the executives who

are leading sustainability efforts on behalf of major

corporations and non-profits, and in this elite circle

of sustainability executives, there is a tendency

toward a consistent definition of “sustainability” that

is often referred to as the “triple bottom line.” The

three Ps of the triple bottom line are Profit, People

and Planet.

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PROFIT – from reducing waste and costs today, to

ensuring that resources will be available for sustainable

profitable operations long term.

PEOPLE – from compliance in HR, OSHA and cus-

tomer safety today, to social responsibility and

ensuring the sustainable well-being of future genera-

tions of customers and employees.

PLANET – from environmental compliance today, to

long term global environmental viability to sustain the

ecosystem that human life and commerce depend on.

While each organization’s definition might vary, the

“triple bottom line” definition at least influences sus-

tainability practices in most companies with a

commitment to sustainability.

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Scope And Methodology: LeadingCompanies In Sustainability

Of 1241 companies that are on one or more of the

Fortune 500, FT Global 500 or the Forbes Largest

Private Companies lists, fewer than half of the compa-

nies list in their public documents an executive with at

least partial responsibility for sustainability and the

environment. Most surprising is that of the 1241 com-

panies researched, there were only a total of 191

executives listed with responsibility for sustainability

(and/or the environment) explicitly indicated in their

job title. As it turned out, many other companies had

someone performing sustainability duties and provid-

ing cross functional leadership to green activities that

were bubbling up in various functions throughout the

organization.

We focused our study primarily on larger global public

and private organizations, and we also included several

mid sized specialty companies, universities and other

organizations with advanced sustainability practices. In

total we reviewed the credentials of 214 executives with

key responsibility for sustainability, and we engaged 61

of them in a structured individual interview.

To maximize the degree to which participants could

be open and transparent with us, we agreed to make

their participation and their employers anonymous

and their comments unattributed. As we conducted

our research and interviews, the spirit of the sustain-

ability executive community was remarkable. The

executives we interviewed had a clear spirit of shar-

ing, and a true mission of preserving the environment

and its resources for future generations, and they

were equally committed to their fiduciary responsi-

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bility to the employers, shareholders, customers and

communities they impact.

Companies Represented in the Interviews:

For this study, Hudson Gain conducted original

research and interviews with sustainability leaders from

leading companies in a range of sectors including:

8

AutomobileManufacturers

Chemical Companies

Consumer Products

Energy Producers

Media & Publishing

Food and Beverage

Healthcare Servicesincluding HospitalSystems

Pharmaceuticals

Retailers

Financial Services

Business Services

Technology and ComputerProducts

Universities

Page 9: The Chief Sustainability Officer Role In Corporations

Conclusions

The authors of this study conclude that it will continue

to be a competitive advantage for a company to have a

sustainability function. The reason is that many initia-

tives yield meaningful near term cost savings.

Increasingly, sustainability leaders are identifying and

making progress toward initiatives that promise long

term efficiencies. Experienced sustainability leaders

are also keen to strike a balance, and can point to just

as many initiatives that present extreme long term ROI

challenges. One head of sustainability said, “We can be

the greenest company on the planet but if we are losing

money, we won’t be in business any longer.” He and

others also talked about the importance of the long

view, reinforcing that sustainability is a function that

looks well beyond the near term costs and savings.

After all, if businesses do not operate in a way that

ensures enough clean water, soil, air and energy to sup-

port growing populations, it will make it very hard for

any business to be in business.

Further, it is clear that there is a very limited talent pool

of experienced sustainability executives. As noted ear-

lier just over 200 sustainability bosses could be

identified from over 1200 companies. For the typical

newly created position, the Board, CEO, CFO and/or HR

would determine the required skills and qualifications,

interview candidates (internal and external) and

appoint someone to the role. Because of the newness

of sustainability as a dedicated business function, and

because of the shortage of talent, instead of appointing

someone to set a strategy, marshal resources and

engage the organization, many CEOs are simply handing

off the sustainability responsibilities to an existing

employee whose main credentials are an interest in sus-

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tainability and strong reputation in the company. While

many sustainability chiefs have flourished in this sce-

nario, this hiring strategy runs the risk of mixed results.

Because of the newness of a formalized sustainability

function, there simply are very few people with more

than just a few years of experience.

Boards, CEOs, CFOs and HR need to

take a more systematic approach to

designing the role, and selecting

from available talent internally and

externally, and developing and sup-

porting that talent (see more under

“Requirements for the Chief of Sustainability Job”).

During our interviews, innovation had a high coinci-

dence with sustainability leaders who were finding

solutions to the long term challenges. Screening for

innovation ability, and supporting innovation will be cru-

cial to the successful hiring and development of sus-

tainability talent.

The authors of this study believe that Wall Street will

ultimately reward sustainable practices. Sustainable

business practices can impact the following metrics,

and when they do, they will be posi-

tively factored into the valuation of

companies:

• cost savings achieved through

reduction of waste

• reduced liability derived from more responsible han-

dling of materials and pollutants

• performance of a business based on their ability to

attract and retain the most qualified employees

• long term viability of a business due to its access to

sustainable resources and customer bases

10

Wall Street will

ultimately reward

sustainable practices

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The challenge for companies today is to select, appoint

and empower sustainability leaders who understand

and act on this connection between sustainability, com-

pany performance, and company valuation.

While there is a debate about

whether or not long term

prospects for Return on

Investment (ROI) are realistic, we

found at least one case study in

which ROI from long term sustain-

ability activities was both realistic,

and reflected in net present value (NPV) in the short

term.

Case Study

Random House, Inc. is one company that has imple-

mented a number of environmental initiatives with

positive ROIs in the last few years. “Given that wasted

carbon usually equates to wasted dollars, it’s no sur-

prise that many of these have been reduction or

efficiency projects” says Andrew Van Der Laan, lead for

sustainability initiatives at Random House. “And it’s

become increasingly clear that our

core business strategy and our

sustainability strategy are inextri-

cably linked because of these

efficiency opportunities.”

A perfect example is Random

House’s recent overhaul of their warehouse lighting.

They replaced metal halide lights with fluorescent

lights that used 40% less energy with no noticeable dif-

ference in light output. Additionally, they installed

motion detectors and timers to ensure that lights were

always turned off in unoccupied portions of the facility,

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“This was a project that

made good business sense,

even before we considered

the environmental benefits.”

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which increased the energy savings. This upgrade cost

Random House just over $800,000, but the investment

has been well worth it. The initial analysis suggested

that the upgrade would reduce annual energy con-

sumption by about 3.4 million kWhs, generating nearly

$400,000 in annual savings, and that’s been borne out

by the actual results in the first nine months after the

project was completed. That’s a payback period of just

over two years even at current electricity prices, which

Van Der Laan notes have been increasing by double

digit percentages for the last several years. “This was a

project that made good business sense, even before we

considered the environmental benefits,” he says.

However, he points out that green was definitely part of

the pitch, saying “We highlighted the fact that the

regional grid supplying our warehouse facility derives

much of its energy from coal, and therefore produced

50% greater emissions than the electricity we were

using at other facilities. That let us talk about the addi-

tional benefit of reducing more emissions per dollar

invested than would have been possible at any other

facility.”

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Requirements For The CorporateHead Of Sustainability Job

We asked sustainability leaders what the requirements

of the job are, and specifically, we asked what qualities

are “universal” regardless of size of company or indus-

try, for-profit or non-profit. As a control we also asked

what they felt was specific to their industry or sector.

Below are the top “universal” qualities, criteria and

characteristics of effective sustainability executives:

COMMUNICATION – Virtually everyone we inter-

viewed placed a high importance on communications

skills. CSOs need to educate and persuade, and they

need to mobilize resources and inspire people to

action. Communication is also seen as a lever for driv-

ing action by creating awareness of financial aspects.

One leader encouraged, “sensitize people to the effect

sustainability has on finances and reporting.” Many of

the CSOs also warned against making communications

the cornerstone of the strategy – if it is all talk and no

science, or no action, the initiatives become hollow and

tend to fail.

TECHNOLOGY – A good CSO candidate needs to be

generally familiar with the technology of the organiza-

tion he or she serves as well as the technology of

sustainability (energy, waste, carbon emissions, etc.)

and how their company creates footprint in these

areas. One CSO said, “The technology aspects of ener-

gy sustainability are universal.” The same can be

argued for the science of waste, carbon emissions and

many other technological components of sustainability

strategy.

FINANCIAL RESPONSIBILITY – While most of the

CSOs agreed there are long term benefits that compa-

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nies often strive for, the great majority cited short term

opportunities to save money with sustainability prac-

tices. One executive told us that it is much easier to

build support for sustainability, “if it saves money, and

if it improves your standing on Wall Street.”

MEASUREMENT – Gather data, establish your base-

line, benchmark to your peers, set goals, and

continuously improve, measure, and start the cycle all

over again.

INNOVATION – Most of the CSOs were very modest

about what is happening in the field today, and stressed

the urgency to find new drivers of sustainability. To

paraphrase the comments of many of our interviewees

- what is going on now is not enough.

ETHICS – Keeping balance among the three Ps of the

triple bottom line - profits, people and planet - and pur-

suing these with transparency and for the right rea-

sons.

SUPPLY CHAIN – CSOs need to understand the entire

supply chain in order to reduce footprint at each stage

of design, sourcing, producing and delivering the goods

and services of their organization. The most advanced

sustainability programs are making changes in their

own operations, throughout their supply chain, and in

their suppliers’ and customers’ behavior. They’re driv-

ing customer behavior by both educating their

customers, and by leading R&D to change products in a

way that is conducive to lower energy use, greater recy-

clability and reduced end of use impact.

OPERATIONS, STRUCTURE AND CULTURE – CSOs

need an understanding of how structure and culture

works in order to have the type of impact required to

make sustainability a priority for every department and

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division in the organization, and have to be empowered

by Boards, CEOs, CFOs and HR with the right authority

and resources to get the job done. As one person put it,

“Sustainability is a direction that every department must

take. It’s a matrix organization; I have to partner with all

the functions. Sustainability is about alignment.”

The above requirements were voiced consistently during

our interviews with CSOs. A number of other worthy

requirements were suggested as well, and they include:

• Commitment to the 3 P’s of sustainability.

• Ability to change culture, and make sustainability

part of every job.

• Quantitative approach, measurement, ability to quan-

tify carbon footprint and other parameters.

• Financial approach to showing ROI.

• Operational expertise such as understanding of cool-

ing systems and facilities.

• Deep technical expertise in the underlying science

and engineering that will ultimately drive change.

• Ability to foster complete change in a business, or as

one CSO put it, “we’ve been a natural gas company

[for many decades]; there won’t be any gas compa-

nies in the next century.”

• Ability to marshal support.

• Support from the CEO, the C-suite and the board. Yet

one sustainability leader added, “what the C-suite is

looking for is a little shy of what is needed.”

• Ability to influence all levels and functions.

• Ability to generate cost savings, and ability to per-

suade others about importance of long term benefits

that may incur higher costs today.

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• Partner with the communications function.

• Combination of business and environmental back-

grounds.

• Measurable prior success in sustainability.

• Understand your specific industry, and understand

most of what gets done in sustainability is transfer-

able across industries.

• Ability to map the company’s impact.

• Strong auditing skills.

• Strong vendor selection and management skills.

• Strong project management skills.

Advice to companies looking to hire their firstCSO and advice to new CSOs

This is not your father’s career. Stock and cash alone

will not lure a sustainability boss away from a top post.

This is a breed of executive with multifaceted motiva-

tions. What will lure them is the opportunity to have

the biggest, most enduring impact on the largest num-

ber of constituents. If your company is ready to

support such challenges and benefit from conquering

such challenges, then you will be in position to attract

the best CSO talent.

Even if your company already has a sustainability func-

tion, expect it will continuously change in the coming

years, as new, more impactful best practices emerge.

Organizations should place in the role someone who

leads, innovates and builds, rather than someone who

operates or manages.

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Some additional advice from the panel ofCSOs we interviewed

• Look for the right talent internally and externally to

lead the charge.

• Use outside experts to get a fresh look at your com-

pany and scope out the charter of your sustainability

initiatives and role of the CSO.

• Like any business function, there needs to be a boss,

but like great HR makes everyone a better people

manager, great CSOs will make sustainability part of

everyone’s job.

• Partner with government, Non-Governmental

Organizations (NGOs), academia.

• Find the most supportive employees, and engage and

support them first.

• Find a way to tie sustainability to values that already

exist in and drive your company.

• “The better educated graduates want their personal

values to align with the work. They want to work for

someone they feel proud of, so the company policy

on sustainability and [corporate social responsibility]

is a plus for recruitment.”

• Communications is important to build support, but

avoid a communication-only strategy.

• “Don’t over staff this thing. Building a big sustain-

ability shop signals this is an operation.” Rather,

imbed sustainability in the culture, function as an

internal consultant, and “facilitate the process.”

• “Your board members should be from companies

that are implementing sustainability.”

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Other CSOs suggested alternatives to hiring aCSO

• Board member with sustainability responsibility, to

act as a thought leader and catalyst on forward-look-

ing sustainability opportunities, and a watchdog on

norms and compliance.

• “If someone has a passion for improving the business

[and a passion for improving the business’s impact on

the world], then I would go with the internal person

and support them with consultants.”

Making a commitment to hire a CSO is significant for any

organization, and sustainability heads are in short supply.

So the competition to find and identify qualified CSOs will

create a fair amount of churn in the marketplace. The best

sustainability executives insist on support from the top. One

sitting sustainability head said, if he was approached about a

new role, “I would want to interview with the top person. If

there is no connection or synergy, it is not going to work.”

Hiring a Sustainability Boss from the Outside,or Promoting from Within?

We asked our interviewees, when an organization is creat-

ing a Sustainability role for the first time, whether they

should hire from the outside, or develop from within. The

results are as follows:

18

16.4%Outside

36% Depends* 21.3%

Inside

26.3%Outside if you

don’t have someone inside

* depends on company size, culture, need for company knowledge versus sustain-ability knowledge, potential need for a new perspective and/or changemanagement ability, etc.

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Where CSOs Come From

During the interviews, CSOs reflected on their back-

grounds more as springboards than as prerequisites.

In practice, CSOs come from a wide range of educa-

tional backgrounds, business function experience and

industries. The following functions represent the areas

from which many sitting sustainability executives built

their credentials:

• Change Management

• Engineering and R&D

• Environment and Safety

• Finance and Audit

• Human Resources and Organizational Development

• Law and Compliance

• Operations

• Public Relations and Communications

• Strategy Consulting

• Supply Chain

The above functional experience in and of itself does

not make someone qualified for the top sustainability

job. The CSOs most recognized by their peers were

perceived to have strong people skills and an ability to

turn vision into action. As a broader talent pool, the

CSOs we interviewed demonstrated a passion about

the issues, and a motivation for continuous learning.

Setting Standards

Throughout the study and during the interviews it

became very clear that there is a short list of organiza-

tions, councils and standard setting bodies that are

shaping generally accepted practices in sustainability.

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Before you hire or promote anyone to lead sustainabili-

ty in your organization, ask them what they can teach

you about:

• CERES Reporting www.ceres.org

• Dow Jones Sustainability Index www.sustainability-

index.com

• Environmental Protection Agency www.epa.gov

• GRI Guidelines www.globalreporting.org

• ISO 14001 www.iso.org

• Millennium Ecosystem Assessment www.maweb.org

• National Resources Defense Council www.nrdc.org

• US Green Building Council (and LEED certification)

www.usgbc.org

• World Business Council for Sustainable Development

www.wbcsd.org

• World Resources Institute www.wri.org

Additionally, sustainability leaders actively partner with

specific organizations in their communities or in their

sector. A strong candidate for the top sustainability

post at your organization should be able to talk about

their connections to and strategy for partnering with:

• Universities, various

• NGOs, various

• Energy Utilities, various

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Guide to Building CSO Talent from the Insideversus Buying Experience from the Outside

If your organization has never had a sustainability head

before, or if you are faced with replacing, expanding or

upgrading the role, these seven steps will be vital to

your success.

• Leadership team and Board meet to determine the

business objective for creating the sustainability role.

Collectively envision and define what success should

look like one to three years in the future. Understand

that adding this role may require a new level of col-

laboration at the senior leadership team level.

• Partner with an outside expert in sustainability lead-

ership to clarify role and responsibilities, build

requirements and objectives for the sustainability

position, and be sure that the objectives of the role

align with the organization’s business objectives.

• Working with a talent acquisition expert (such as

your internal talent/staffing group or an outside

expert in sustainability leadership and executive

search), map out a search process that considers

both internal and external CSO talent.

• In the event the best candidate is internal, prepare (in

advance) a development plan for the newly appoint-

ed sustainability boss. Be prepared to invest in

training and/or coaching in soft skills such as com-

munication, influencing, leading, managing change,

etc. Be prepared to invest in hard skills and certifica-

tions in technology, audit, etc.

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• In the event the best CSO candidate is external, pre-

pare (in advance) an on-boarding plan that gets the

outside hire up to speed on your culture. The best

on-boarding programs involve multiple stakeholders,

maximize engagement across the business, generate

early wins and make the outside hire an insider more

quickly.

• Conduct the search including targeted candidate

research, interviews, assessments and references.

Ensure “apples to apples” comparison of sustainabili-

ty talent by applying the same discipline for internal

candidates as for external candidates. Make the hire.

• Follow through on training, development and on-

boarding.

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Challenges Of Sitting CSOs

Sustainability is not a zero-sum proposition. It can be

implemented in ever increasing stages of profitability

and employee engagement. As you create or fill the

CSO role, be prepared to support and empower your

sustainability boss through a number of typical obsta-

cles. Below are some of the specific challenges that

CSOs voiced:

• Getting the organization engaged, pushing people

beyond their comfort zone

• Changing processes

• Getting companies to act on their plans.

• Getting the data you need to set a baseline, compare

to benchmarks, set a target, and measure against

targets in energy usage, pollution, recyclability of

products, etc.

• Showing the numbers to people, getting them to go

green.

• Reducing our footprint

• Helping customers reduce their footprint.

• Transcending the organizational structure and cul-

ture, “from working with a housekeeper fishing

medical waste out of the garbage in a hospital to get-

ting the CEO to issue a press release [or a new

policy].”

• Leveraging those already engaged while educating

those who are not.

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• Getting the right mix of marketing/communications

and operational change and HR to make things happen.

• Educating people in a way that makes them knowl-

edgeable, confident and ultimately engaged in

making an impact.

• Bring together all the disparate activities and

resources in a manageable, understandable single

process.

• Data collection: what are our usages, footprint, and

where.

• Complexities of a post-off-shoring world: “electricity

is more [expensive] in India than in North Carolina,

and the Indian facility emits more carbon than its

North Carolina counterpart.”

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Top Sustainability Leadership –Companies And People

Skeptics are quick to question the motives or genuine-

ness of sustainability at companies like Wal-Mart or BP.

The fact is other companies nearly as large are doing

nothing. If shareholders come to expect that compa-

nies continuously improve sustainability, which benefits

everyone, then we’ll ultimately have the Wal-Marts and

BPs to thank for getting the competition started, even if

they are not always seen as the perfect examples of

everything that can possibly be done.

During the interviews the 61 participants in the study

recommended 95 individuals and named over 120

companies as being noteworthy examples of top lead-

ers in the creation and development of sustainability

functions.

Their criteria for being a “Top CSO” were:

• Creative, innovative and breaking new ground.

• Delivering results in sustainability across the 3 P’s of

the Triple Bottom Line.

• Great communicators.

• Someone who sets a vision, gets the ball rolling, and

measures success – typical in any function, but diffi-

cult in the new and sometimes elusive area of

sustainability.

• Freely sharing what they do with other companies.

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The Making of a Sustainability Success –Featured Executive

Dawn Rittenhouse joined DuPont in 1980 and has held

positions in Technical Service, Sales, Marketing, and

Product Management within the Packaging and

Industrial Polymers business and Crop Protection busi-

nesses. In late 1997, she began working in the

corporate organization to assist DuPont businesses in

integrating sustainability strategies into their strategy

and business management processes. She leads

DuPont’s efforts at the World Business Council for

Sustainable Development (WBCSD) and the United

Nations Global Compact. She also manages the cor-

porate recognition program for Sustainable Growth

Excellence. In 2007 she also picked up responsibility

for DuPont’s efforts on climate change. She is current-

ly on the Board of ERTHNXT, the Advisory Committee

of Bridges to Sustainability and the Education

26

COMPANIES MOST NOMINATED BY THEIRPEERS AS DOING THE MOST IN SUSTAINABILITY

Wal-Mart (10 mentions)

DuPont (8 mentions)

Coke, Interface, Nike, and Starbucks (6 mentions each)

INDIVIDUALS RECOGNIZED BY THEIR PEERSAS TOP SUSTAINABILITY PROFESSIONALS

Ben PackardVP Global Responsibility

Starbucks

Dawn Rittenhouse Director, Sustainable Development

DuPont

Matt KistlerSVP Sustainability

Wal-Mart

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Committee of the Delaware Nature Society. Dawn has

a double major in Chemistry and Economics from Duke

University.

A Note About DuPont

DuPont is one of the first companies to publicly estab-

lish environmental goals which it started doing 18 years

ago. It has broadened its sustainability commitments

beyond internal footprint reduction to include market-

driven targets for both revenue and research and

development investment. The goals are tied directly to

business growth, specifically to the development of

safer and environmentally improved new products for

key global markets. DuPont is a science-based prod-

ucts and services company. Founded in 1802, DuPont

puts science to work by creating sustainable solutions

essential to a better, safer, healthier life for people

everywhere. Operating in more than 70 countries,

DuPont offers a wide range of innovative products and

services for markets including agriculture and food;

building and construction; communications; and trans-

portation.

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Looking Ahead To Sustainability11..00 And 22..00

Regardless of what industry you look at, there are basic

“1.0” sustainability practices that may seem like com-

petitive advantages now, but will soon become eclipsed

by “2.0” level sustainability innovations. That said,

there are other industries or organizations, where tak-

ing a 2.0 approach now may be too disruptive, and

initiatives may not generate enough support to be

effective. The art of success will be gauging the right

strategy for your business.

Sustainability may have a long way to go, but it is noth-

ing new. One CSO told us that a U.S. based luxury car

maker, during in 1980s “developed a new headliner,

[the covering on the interior roof]. It was a new prod-

uct. We wanted to make the headliner out of a fairly

rigid material. We evaluated materials. The one we

went with was recycled bottles. It was the best kept

secret at [luxury car maker].” This CSO explained fur-

ther that the company couldn’t tell customers that

recycled bottles were in a [luxury car brand]. But it

sparked an interest in other recycled materials, which

led to “recycled compact discs in switches.”

Sustainability goes back farther than that. You might

recall returnable reusable soda bottles, or the diaper

service that picked up dirty diapers, and dropped off

clean diapers. Perhaps reusable products will make a

come back. But sustainability goes back even farther

than these. A popular maker of environmentally

responsible consumer products, Seventh Generation,

takes its name from the Great Law of the Iroquois

which states, “In our every deliberation, we must con-

sider the impact of our decisions on the next seven

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generations.” Revitalizing timeless truths to drive a

futuristic approach to business is working for Seventh

Generation. Let’s take a look at where large organiza-

tions are today, and where they are taking

sustainability. We’re confident the future of your busi-

ness will benefit from this collective insight.

Reactive Sustainability Practices (pre-1.0)

• Communications or legal or regulatory affairs related

activities only.

• Traditional ‘environmental’ function steeped in safety

and compliance.

• Biggest reason for activity is to save money.

• Recycling programs.

• Labeling products and packaging for recyclability.

Sustainability Version 1.0

• The sustainability boss is a C-level position, empow-

ered to make sustainability integrated in the business

and part of everyone’s job.

• Educating your customer about the company’s cur-

rent sustainable practices.

• Packaging made from recycled materials.

• Eliminating secondary packaging.

• Reducing energy usage in plants, offices and via cor-

porate policies such as reducing executive air travel.

• Retooling and reorganizing plants for more sustain-

able operations.

• Enabling the sustainable behavior of your employees,

customers and of your suppliers.

• Lighter paper that takes less energy to ship and less

energy to cart away to recycle.

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• Conducting sustainability audits, and managing peo-

ple and resources to improve key sustainability

metrics. One CSO cited, “It is not a top down process .

. . some of our most exciting savings with energy use

came from challenging the employees on the floor”

Sustainability Version 2.0

• Agenda of “zero footprint”.

• Normal business operating at a negative carbon foot-

print (and possibly selling carbon offsets as a

by-product) rather than buying carbon offsets to

make normal operations carbon neutral.

• Outside verification of the sustainability audit, “a lot

of people are suggesting Carbon Offsetting should

fall under Sarbanes Oxley”.

• Redesigning products for sustainable manufactura-

bility.

• Networked power supplies in computer networks:

when users turn off computers, the network detects

what peripherals, servers and cooling systems won’t

be needed, and switches them off too.

• Regenerate energy from the heat from computers,

battery chargers, power supplies and servers to con-

tribute to the generation of electricity.

• Designing for the sustainability at each phase of the

product’s creation, production, use and disposal. For

example, one CSO suggested, “in electronics, reducing

energy use in the products, and reducing the toxins

that are released from the products at disposal.”

• Popularizing the consumption of foods and bever-

ages at room temperature for foods and beverages

that don’t require refrigeration such as soft drinks.

• Influence and measure the rate at which your prod-

ucts are recycled after use.

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Best Quotes from Our Interviews

“More and more the board is discussing [corporate

social responsibility] and considering [it] when making

decisions.”

“I can make buildings 100% [green], but then we won’t

be in business.”

“Some employees are pushing for us to change faster

than we are. Younger employees tend to be more green.

I think [buying into sustainability] is a generational

issue as much as an industry issue.”

“Lead customers rather than follow their lead. We

research chemicals, and pull them before the govern-

ment issues a warnings or a ban.”

Examine “. . . the environmental fate of chemicals,

where do they go after use, what are the substitutes,

are they worse . . .”

“Europe is head and shoulders ahead of [the U.S.]”

“China has no environmental regulations; everything is

going to the air, the rivers. We [consumers] are pollut-

ing the planet so we can have cheap goods.”

“We have to end our ‘dependence on foreign oil’, that

phrase has one too many words, we have to end our

dependence on oil period.”

“We have an OD [organizational development] group

that we lean on to move these issues forward.”

“Recycling isn’t true sustainability”, but another person

added, “recycling is not saving the world, but it gets

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people where they live. It is a visible, noticeable, inter-

active program that is understood by everyone.”

“The chief consideration is a broad and strategic mind-

set because sustainability is not about a single function.

It’s really about the fact that the earth is about to dou-

ble in population in the next couple of decades and the

people in those areas that are about to double are in

developing areas. They are becoming more affluent and

will be vying for the same resources as we do.

Sustainability affects all inputs.”

On behalf of a leading beverage company it was said,

the perception is that bottles and water are its big sus-

tainability issues. “The reality is [beverage company’s]

biggest impact on the environment is its refrigeration.”

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Credits

About the Authors of this study:

James Celentano founded Hudson Gain Corporation in

2003, has 14 years of human resources, executive

search and leadership development experience and is

an adjunct professor at New York University.

Roger Thorne has over 25 years of experience in orga-

nizational development, process improvement, and

human resources leadership, and is a Managing Partner

at Hudson Gain.

Victoria Zelin has over 20 years of change management,

organizational development and executive search experi-

ence, and is a Senior Vice President at Hudson Gain.

Patricia Samperi has over 10 years of experience in

corporate communications and management consulting,

is founder of Green Your Culture and is a senior con-

sultant in the extended team at Hudson Gain

Corporation.

Hudson Gain would like to thank the many organiza-

tions, sustainability professionals, consultants and

members of academia who participated in this study.

Sharing your insight and comments on an unattributed

basis maximized the frankness of this study. Without

your contributions this study would not have been pos-

sible. Additionally, we thank Andrew Van Der Laan and

Random House for sharing their case study; we thank

Dawn Rittenhouse and DuPont for sharing their details

for publication; and we thank Jonathan Cloud, the

entrepreneur-in-residence at the Sustainable Business

Incubator at Fairleigh Dickinson University for his

insight and feedback as we conceived of and conduct-

ed this study.

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About Hudson Gain

Incorporated in New York in 2003 to deliver talent

acquisition and talent development services, Hudson

Gain Corporation is a boutique leadership solutions

firm serving the needs of client companies throughout

the world. Hudson Gain works with client organizations

to acquire leadership talent, accelerate the development

of management and leadership skills among high poten-

tial managers and leaders, and provide guidance,

support and solutions for companies in transition. Our

service offerings include Executive Search, On-Boarding,

Executive Assessment, Recruitment Process Design,

Leadership Development, Talent Management, Sales

Effectiveness, Management and Communications Skills

Training, Organizational Design, Employee Engagement

for Leaders, Human Capital Aspects of Merger

Integration, and Change Management for Sustainability.

Contact

To discuss sustainability, leadership or any need your

organization may have in executive search, human capital

development or change management, feel free to

directly contact Roger Thorne and Victoria Zelin.

Roger Thorne

Managing Partner

Hudson Gain Corporation

[email protected]

212 835 1601

Victoria Zelin

Senior Vice President

Hudson Gain Corporation

[email protected]

212 835 1602

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©2008 Hudson Gain Corporation

Page 35: The Chief Sustainability Officer Role In Corporations

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