The CSO Dilemma
When you attend a conference where 5 to 7 topics are offered each time slot, you almost feel as if you’re back in school. I had been attending the large plenary sessions on a variety of issues from corporate governance to product stewardship while attending the Global Reporting Initiative’s 2010 Conference on Sustainability and Transparency, so this afternoon, I decided to attend a small workshop, taking a break from the large hall on the RAI Elicium’s ground floor. The workshop focused on how to become a leader on Sustainability Issues in your company. Leaders in any function or industry generally have the same qualities: vision, exemplar communication skills, resolve, and integrity. But an exercise I found fascinating was led by Tom Dodd of DG Enterprise and Energy. The attendees were split into three groups, rotating every 20 minutes. During our time with Mr. Dodd, he gave us pictures of notable personalities from around the world, and upon glancing at their faces, come up with words to describe them. I drew Al Gore, whose career I have followed for 20-plus years. The picture I had was a recent one, gray and showing his age--not the 40-year old upstart that ran for President in 1988 and talked about global warming long before many of us even knew what that term meant. But of course the memories of his tepid 2000 Presidential campaign crept in and I could only think of one term: “detail oriented.” The Europeans in my group looked aghast, and threw in words like charismatic, visionary, and empowering that to me, may have been true 20 years ago, but had since escaped me, years after that miserable 2000 election recount in Florida. Other participants in that workshop did far worse: they drew pictures that almost none of us could recognize. The one thing they all had in common? They were all leaders in the sustainability world. That little chapter leads me to the predicament that many chief sustainability officers face in their organizations. Like the chief strategist, they have a position with no P&L responsibility and few tools allowing them to quantify their results. The CSO is also a relatively new position that few companies have on staff—that hat is often held by someone at the director or VP level--or even by committee. But if ESG (environmental, social, and governance) and financial data become integrated, as many speakers have advocated during these three days in Amsterdam, this position could possibly become more important. And at a higher level, sustainability, at least in the United States, has not gone mainstream yet. Furthermore, because of the political climate in the US, that word, unfortunately, is often polarizing. But what if the GRI framework becomes a standard in the United States? And what if a firm's CSO or someone holding an analogous title must sign off on that ESG report before it iss released? Let’s look at the Securities and Exchange Commission’s regulations: since the US Congress passed the Sarbanes-Oxley Act in 2002, a firm’s CEO and CFO both have to sign statements verifying that the facts and data in a firm’s annual report (the 10-K) are accurate, or face hefty fines and even prison. So what if this rule in the future replied to a chief sustainability officer? What if the tools that emerge for measuring ESG reporting in the coming years give future CSOs enough clout inside and outside one’s organization so that he or she must sign their name stating that all that information covering social, environmental, and yes, financial information, must be certified? Perhaps this is a pipe dream. I can see the commentary forecasting the end of the world if this became a hot topic of discussion. But it’s something to think about. I have a feeling the title, chief sustainability officer, would become mainstream pretty quickly. And considering the disaster in the Gulf of Mexico that looks worse than we already think, the timing certain is good for such a discussion. Let me know what you think.