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June 27 — Sustainability is climbing the corporate ladder as environmental and social efforts move more firmly into the purview of chief executive officers and boards of directors.
Professionals in the field say it reflects a recognition that sustainability can matter to strategy.
“A lot of companies that are committed at the top are bringing the sustainability mindset into the strategy realm where it’s not just talked about but played out,” Dave Stangis, vice president of corporate responsibility and chief sustainability officer at Campbell’s Soup Co., told Bloomberg BNA.
Stangis is one of several sustainability leaders at companies with revenues greater than $1 billion who report more directly to the C-suite or board of directors than they have in the past, a recent survey by GreenBiz Group and sustainability recruiter Weinreb Group showed.
The level of CEO commitment to sustainability seems to going up as well. Nearly all CEOs who are members of a United Nations corporate sustainability initiative say they feel a personal obligation to be able to articulate a purpose that goes beyond the basics of doing business, according to a new study from Accenture Strategy.
“You could argue cynically they feel more pressure, or they intrinsically recognize the challenge and they feel more obligated,” said Accenture Strategy’s Peter Lacy, who has advised executives and senior management at companies such as Coca-Cola and General Electric.
More than two-thirds of CEOs surveyed say sustainability is part of their board-level discussions and over half see sustainability in their strategies.
One often-cited example of CEO engagement on sustainability is Unilever chief Paul Polman. Since he took the helm, the consumer goods giant has been ranked as the world’s most sustainable company six straight years in a survey conducted by GlobeScan and SustainAbility.
“What makes Unilever rare is that in the consumer products value chain, you very rarely see executives able to think about these issues at a strategic level” because “they don’t seem core to your typical executive running a shampoo brand or making a food product,” Andrew Winston, an adviser, author and speaker on sustainable business issues, said in an interview.
But they are becoming increasingly relevant as the British-Dutch multinational’s so-called sustainable living brands, such as Dove and Ben & Jerry’s, grow faster than the rest of its business. These brands delivered nearly half of Unilever’s total growth in 2015.
Other consumer-facing companies that are making sustainability part of their core mission include Ikea and Patagonia, according to the SustainAbility Leaders survey.
Job titles offer another sign that sustainability is maturing.
The person in charge of sustainability efforts was most often a manager in 2004, according to an analysis by the Weinreb Group. But today the highest-ranking sustainability executive tends to be a vice president or director.
Stangis is proof of how the profession has evolved. The sustainability veteran joined Campbell's from Intel Corp., where he invented the role of corporate responsibility director.
“We actually posted the job,” Stangis said. “Even though I created the job, I still had to compete for it.”
He has done the same at Campbell's. Now that sustainability is part of the nearly 150-year-old company’s branding—“real food that matters for life’s moments”—Stangis reports directly to the company’s chief executive officer.
There are fewer layers between Microsoft Corp. CEO Satya Nadella and chief sustainability strategist Rob Bernard too.
“It’s, I think, a heightened awareness of the opportunities we have to hopefully make a positive difference,” Bernard told Bloomberg BNA. The company is “going deeper” into different sustainability subjects simultaneously, he said, from powering data centers with renewables to saving energy through the Internet of Things.
“What’s enabling that is more and more of our partners and customers are raising this issue,” Bernard said.
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