As companies face rising pressures from consumers, investors, and sustainability reporting regulations, it is essential that the entire C-Suite assumes responsibility for climate action. Whether it’s the Chief Communication Officer ensuring that decarbonisation plans are communicated transparently, or the Chief Procurement Officer taking action on the carbon footprint of the supply chain, the leader of each business function plays a crucial role in helping a company meet its climate objectives.
A C-suite fully engaged in green initiatives sends a strong message to stakeholders that a company is taking climate action seriously.
Gone are the days of Chief Sustainability Officers (CSO) as the sole guardians of a company’s climate strategy. As COP28 approaches, businesses that maintain this outdated mindset will struggle to implement an actionable and robust climate strategy. Instead, a company’s full leadership team must take the initiative and claim individual ownership of driving climate action within their specific business functions.
Mobilising the collective intelligence and power of the entire C-Suite gives companies a much better chance of overcoming the enormous challenge of achieving net zero targets. A C-suite fully engaged in green initiatives sends a strong message to stakeholders that a company is taking climate action seriously, helping to galvanise the whole company in achieving climate objectives.
CEOs and CSOs: Spearheading Climate Strategy
For any company, change can have the most impact when it is supported by leadership teams. CEOs have the power to establish direction when it comes to taking action on climate change. Exemplifying a strong commitment to reducing emissions and prioritising sustainable business strategies will filter down across the whole organisation, inspiring employees to follow suit. This collaborative ethos between employees and leadership promotes green initiatives and impactful climate action.
CEOs are also responsible for making sure that the company’s climate strategy complements its overall business strategy. This is key to minimising pushback from stakeholders, reducing potential distractions for the CEO and their leadership team, and nurturing a trustworthy brand to internal and external stakeholders.
This is where Chief Sustainability Officers have a vital role in helping to build a climate strategy – tracking industry developments and adapting Environmental, Social, and Governance (ESG) strategy accordingly. They work on identifying areas for environmental improvements throughout the business, measuring carbon emissions and other metrics, and communicating with stakeholders about company priorities.
By collaborating with the CEO, the CSO’s role can more effectively implement impactful climate strategies and educate the entire business about the important role each employee plays in terms of their environmental footprint.
CFOs and CIOs: Getting a Grip on Climate Data
Chief Financial Officers (CFOs) are becoming increasingly instrumental in helping companies stay ahead of major global climate regulations. In the same way they manage financial data, CFOs have the requisite skills and knowledge to lead on extra financial reporting.
This includes the Corporate Sustainability Reporting Directive (CSRD) in the EU, the Taskforce on Climate-related Financial Disclosures (TCFD) framework in the UK and the Securities and Exchange Commission´s (SEC) proposed rules on climate disclosures in the US. Tracking and auditing climate data is vital to avoid reputational damage and non-compliance penalty charges.
CFOs are also key decision makers when it comes to investing in decarbonisation strategies and allocating the necessary resources to do so effectively. They, therefore, have an important role in building a strategy to pursue long-term economic and environmental benefits of investing in low-carbon initiatives while alleviating potential short-term costs.
Whilst the Chief Information Officer (CIO) and IT team might not be the first port of call when thinking about emission reductions, they play a key role in implementing a company’s climate strategy. Well-managed data systems, in particular those that track carbon emissions, are an essential ingredient of successful decarbonisation. For example, strong visibility over carbon emission data can help companies identify emission hotspots and prioritise areas to take action. CIOs can also use this data to accurately forecast reduction scenarios, in some cases reducing emissions by 15, to 20%.1
The unique collaboration of CFOs and CIOs to measure and report on extra-financial data, such as carbon emissions, brings with it meaningful insights which can source new opportunities for both financial gains and impactful climate action.
CPOs and CCOs: Executing a Credible Decarbonisation Plan
To this day, companies have made more noise about their net-zero pledges than climate action, leaving them open to accusations of greenwashing and scrutiny from their stakeholders.
Reducing a company’s emissions means acting on the emissions across the company’s supply chain. This is where the Chief Procurement Officer (CPO) carries a high level of responsibility for a company’s carbon footprint. By carefully considering emissions criteria when choosing new suppliers, CPOs can help companies work with their existing suppliers to pursue carbon reduction initiatives, such as improving energy efficiency or designing eco-friendly products.
Avoiding greenwashing claims is particularly important now that investors and consumers are becoming increasingly sustainably conscious, in particular surrounding new regulations such as the EU Green Claims Directive, which proposes that businesses must substantiate environmental labels and claims. The Chief Communication Officer (CCO) has the key role of making sure that companies are transparently communicating their progress and building trust with well-informed customers. They are therefore also instrumental in shaping a company’s climate strategy, helping to communicate climate action accurately and avoid accusations of greenwashing.
It is clear that utilising climate data is needed across all major business functions, whether this is minimising the environmental footprint of supply chain operations or allocating the necessary budget to implement decarbonisation.
The rising pressure of new sustainability regulations and increased public scrutiny means that businesses will have to transform their business models in order to survive in the long term. This green transformation must start from within and requires strong leadership and joint responsibility across the C-Suite.
About the Author
Renaud Bettin is Sweep’s VP of Climate of Action and has over 15 years of experience in the field of corporate climate strategy. Committed to helping businesses be a driving force to reach global net zero, he launched the Net Zero initiative reference framework for corporate carbon neutrality and Info Compensation Carbone, a carbon finance website. His thought leadership has been featured in Carbon Pulse and the World Bank’s Carbon Pricing Leadership Coalition.
Reference
1. Why Data is Key to Enabling Emissions Reductions. July 28, 2021. CIO. https://www.cio.com/article/189038/why-data-is-key-to-enabling-emissions-reductions.html.
