Brands Set For The Rise of the Chief Sustainability Officer

With COP26 set to begin in Glasgow—a summit viewed as a vital moment in the world’s fight against the climate crisis that will see world leaders review their environmental commitments—there has been a growth in “greenwashing” accusations aimed at brands as they try to persuade the public of their good intentions. According to new data from research provider Forrester, just 34% of consumers trust companies who promote their commitment to reducing climate change, while YouGov research earlier this year found that two-thirds (68%) of people in Britain were skeptical of messaging by businesses relating to the environment and social purpose. Yet nearly two-thirds (74%) wanted brands to make "bigger" commitments to lessening their environmental impact. The Forrester research also found that more than two-thirds (69%) of European adults wanted companies to be more transparent in their business practices, with just under half (47%) stating that they would buy from brands that meet their own personal values—with 62% of respondents in Holland, 57% in Spain and 55% in Italy agreeing. Brands keep their promises To respond to this, a quarter more European companies, especially within the retail and financial services sectors, are expected to hire chief sustainability officers to support their intentions, Forrester predicts. This trend echoes the rise of the chief diversity officer, which has become a more commonplace role to tackle concerns around DEI within businesses. "A new pattern of trust is emerging as a business imperative, especially for firms maturing their sustainability journey," wrote Amy DeMartine, Forrester's vp, research director in a blog in response to the predictions. "Customers will only trust brands that follow through on their promises, and they can be demanding. In fact, customers believe that brands should lead the change when it comes to social, environment, and political issues across the globe." She added that companies would need to deliver on their vision and brand promise "no matter what the crisis" and claimed that sustainability practices would "help boost resilience by mitigating risks, helping firms shore up financial resources and streamlining operations." Adweek Podcast: Solving the Sustainability Puzzle Another report by executive search and leadership development consultants, Odgers Berndtson—Unlocking the Route to the Board Table released on October 21—which examines the impact of environmental, social and governance (ESG) issues on corporate structures, found that 90% of FTSE100 companies now employ a head of ESG or sustainability. This is a role that also comes with a seat on the executive committee in many major businesses. In the report David Webber, partner and head of corporate affairs at Odgers Berndtson in Brussels, notes that, “increasingly the focus will be on the ‘G’—especially when it comes to disclosure and certification—increasingly legislation (such as non-financial reporting rules) will drive this—corporate leaders will want to be ahead of the curve.” A new pattern of trust is emerging as a business imperative, especially for firms maturing their sustainability journey.Amy DeMartine, Forrester's vp, research director That governance reached marketing in September when the British advertising regulator, the Advertising Standards Authority (ASA), outlined its intention to pay closer scrutiny towards company messaging to stamp out greenwashing. “We are seriously asking ourselves the question about advertising and what impact our ads have in endorsing or encouraging consumer behavior that is going to have to change in the next 10 to 15 years,” Guy Parker, chief executive of the ASA, told Adweek about the initiative. “If the U.K. is going to meet the target of a 78% cut in carbon by 2035, we're going have to change behavior. So what role is advertising, and particularly ad regulation, going to play in that?” The need for companies to improve follows the European Union’s adoption of a climate adaptation policy, which introduced policies around environmental objectives and standardized sustainability reporting from 2023. Forrester also predicts that those averages would rise over time by 15%. A global trend The introduction of the role will not be exclusive to Europe. In the last week, L'Oreal U.S. announced that it had appointed Marissa Pagnani McGowan as its chief sustainability officer, a new role that will report to president and CEO Stéphane Rinderknech. A similar move was announced just days prior by Caterpillar, the manufacturer of construction and mining equipment, with the promotion of Julie Lagacy, the vice president of the enterprise strategy division, to take on additional duties as its first chief sustainability and strategy officer. In a statement announcing the move, Caterpillar Chairman and CEO Jim Umpleby described sustainability as "an important element of [the company's] long-term strategy for profitable growth." He added that that brand was "committed to contributing to a reduced-carbon future and helping ... customers achieve their climate-related objectives as they build a better, more sustainable world." In the report, Conrad Woody, partner and head of the U.S. Association and Corporate Affairs Practice in Washington for Odgers Berndtson, stressed that ESG was now a "critical vertical for corporate boards, CEOs, and global heads of corporate affairs in the U.S. “Alignment on environmental, purpose, social impact, and diversity, equity and inclusion have been a central part of the function, to effectively advise CEOs on the rapidly changing external environment." Getting Brands to Commit to Net-Zero Carbon Emissions

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The Rise of the Chief Sustainability Officer as Brands Aim to Overcome Suspicions of Greenwashing

Companies will introduce the role to underline belief in environmental commitments

Stephen Lepitak

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Stephen Lepitak