Prioritising sustainability has been a key factor in attracting top talent and keeping them. The convergence of people and sustainability can make the chief person officer (CPO), an ideal leader, to spearhead sustainability initiatives within an organization.
CPOs are uniquely positioned in this role to take the lead. CPOs have a wide network of contacts across the organisation and a deep understanding of its dynamics. This gives them insights and abilities that other functional leaders may not possess.
The CPO’s talent management expertise also helps integrate sustainability in recruitment, development and retention strategies. They are also adept at creating behavioural and cultural change, which is essential to embed sustainability practices in the organization.
We see that as executive search professionals, we are seeing an increase in the number of CPOs who have made sustainability their next career step. “Chief people & sustainability officer” titles are becoming more common. To be successful in implementing this agenda, you will need to navigate a complex environment where several factors are important. Here are some areas that CPOs should focus on to drive change and lead sustainability initiatives.
Stakeholder engagement
Sustainability initiatives are a multi-faceted undertaking that involves a variety of stakeholders both internal and external, such as employees, leadership groups, investors and communities. CPOs have to navigate between these diverse groups and ensure alignment between organisational objectives and sustainability efforts.
CPOs must engage different departments internally to create a sustainability agenda. To achieve this, CPOs must influence and collaborate with leaders in finance, operations and marketing, to ensure sustainability is a key part of business strategy.
CPOs often tell us that the most difficult part of developing a sustainable strategy is to determine how to best coordinate with the entire sector. This requires balancing internal goals with industry standards and navigating complex regulatory environments. It also involves cross-industry collaborations.
Commercial and strategic acumen
Sustainability initiatives should be in line with the overall goals of a company. It is important to take a step back and identify the connections between sustainability, business goals, and the best way to serve the customer. This will help you to develop a strategy that aligns with these.
In order to achieve sustainability, it is often necessary to invest in new technologies, programmes of training, or changes in processes. Leaders must assess ROI and justify these initiatives to the executive team and other stakeholders. This includes an understanding of the ways in which sustainability can result in cost savings or revenue.
Leaders in sustainability with strong commercial skills are able to identify and champion sustainable innovations that benefit the environment, but also improve the competitiveness of the company. It is important to be able to assess how new initiatives can impact the bottom-line and scale them across the company.
Most companies look at sustainability through the lense of risk. This is especially true in areas such as compliance, investor expectations and supply chain vulnerability. In order to be successful in this field, it is important to anticipate potential risks such as those related with environmental regulations or damage to reputation, and position the organization to effectively mitigate them.
Reporting and Legislation
The sustainability of a company is determined by many regulations that are constantly changing, such as environmental laws, labor standards, and corporate governance guidelines. To ensure compliance, CPOs must be familiar with these legal frameworks.
Transparent sustainability performance reporting is one way to achieve this. This includes providing it to all stakeholders, such as investors, regulators and consumers. Investors are increasingly relying on sustainability reports, which have become mandatory in some regions.
The Global Reporting Initiative (GRI) and the Corporate Sustainability Reporting Directive (CSRD) are among those that require extensive knowledge. These include Global Reporting Initiative and Corporate Sustainability Reporting Directive. The EU Corporate Sustainability Due Diligence Directive was also finalised in this year.
Sustainability leaders need to anticipate the future legislation which may affect their company’s operation. Understanding the current legal environment allows them to future proof their organisation, reduce risks associated with non-compliance, and increase long-term resilience.
Building a team with the appropriate knowledge and skills will allow you to stay on top of any new legislation.
HR Leadership: Beyond Alignment
A CPO’s role goes beyond aligning employees with sustainability goals. Sustainability leaders have to navigate a landscape where they must balance internal collaboration and industry standards while translating sustainability efforts into business advantages.
This role is not just about reporting and compliance; it’s also about positioning sustainability as an integral part of business, which drives innovation and resilience. While business trends change, sustainability is based on managing finite resources over the long, medium and short term. Sustainability leaders that can combine commercial insight and a commitment to sustainability practices will help shape the future of their organisation.
