Op-ed by Scott Lane, chief executive of Speeki.
Green incentives are being cut across the world. The Trump Administration’s attack on Biden-era clean technology tax credits is just the latest warning shot. Others will follow.
And yet, the response from many large corporations has been to gut the role of the Chief Sustainability Officer (CSO). In some cases, the position has been quietly downgraded. In others, it’s being eliminated entirely.
In fact, several well-known organisations have already reduced the powers of their CSO – or removed them from their senior leadership teams altogether. HSBC has dropped its CSO from its executive committee, and Standard Chartered has slashed the team that its CSO leads from 140 to 90 people.
Here’s the flawed logic behind these moves: if governments are scaling back green incentives, sustainability is less relevant. CSOs will have less to do.
But that thinking misses the point entirely. One of the core responsibilities of a CSO is to help businesses stay one – or even two – steps ahead of changing regulation, shifting investor expectations, and energy risk. And, right now, that’s more important than ever.
Long-term view
If more companies had strong CSOs embedded into their senior leadership teams 12 to 18 months ago, they might have seen the risks on the horizon. They could have stress-tested their exposure to US green tax credits, locked in incentives while they still existed, or moved faster on green investments.
None of this is hindsight. It’s exactly the kind of forward-looking work CSOs are supposed to be doing – but only if they’re given the power to do it.
Regardless of your view on the sustainability outlook, we can all agree that the future is going to be volatile. We’re in a phase of deep, unpredictable swings – from political rollbacks to war-induced supply shocks to rising demands from younger consumers and investors. That volatility won’t settle down any time soon.
This is when you need serious, experienced sustainability leadership embedded at board level. In fact, of all the C-suite roles, the CSO’s job is arguably the hardest. Their task is to keep the business steady through short-term disruption – while still steering the company toward a long-term destination that’s non-negotiable: one where all firms use energy and resources more efficiently and sustainably.
Defining positive impact
So why haven’t CSOs had more impact so far? If we’re honest, many companies never really took the CSO role seriously to begin with. Over recent years, sustainability has sometimes been treated like a PR exercise – a checkbox for investor decks and consumer trust.
Too many CSO roles were set up to fail. They were under-resourced, had no budget authority, and didn’t sit on the board. In fact, often the job was handed to an already-overloaded CHRO or Head of Procurement. In other cases, the roles were given to well-meaning, yet junior, members of the team who didn’t have the institutional gravitas to move the dial within their companies.
Now is the time to change that – and I’m cautiously hopeful that the recent cuts to green incentives might serve as the well-needed wake-up call. My hope is that CEOs are forced to reckon with the fact that sustainability isn’t a side issue. It cuts straight to profits, strategy, and risk.
In practice, this will mean two things. Firstly, it means putting CSOs on an equal footing with your CFO, COO, and CTO. Giving them real decision-making power. CSOs should be present in every business-wide strategy discussion. They should be core, vocal members of the senior leadership team – and, likely, present on the board and audit committees as well.
But a CSO’s role needs to go beyond just raw seniority. Without real authority over how money gets spent, the role becomes symbolic. And symbolic leadership doesn’t move the needle.
Decision-making powers
That’s why, secondly, CSOs need to be given tangible, concrete decision-making powers. At a minimum, that means giving them direct oversight of all energy and resource spending. It means ringfencing a dedicated budget for pilot projects – and not forcing them to beg for scraps from other departments.
And it means embedding them into capital project investment allocation decisions, such as real estate, manufacturing plants, and warehousing, where long-term resilience is being weighed against short-term returns.
If the world is becoming harder to predict, the answer is not to get rid of the people whose job is to help you plan for the future. It’s to back them properly. The job is serious. The response should be too.
Now is not the time to dismantle your sustainability function. It’s time to double down.
Speeki provides advice, software, and assurance solutions to help companies build sustainability programmes. For more information, visit www.speeki.com.
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