Boyden, the leadership and talent advisory firm, has shared its concern for industrial companies grappling with multiple challenges as they strive to address sustainability and deliver on their goals for the Global Stock Take of the Paris Agreement at COP28 in November 2023.
Boyden’s analysis of industrial companies in the FTSE 250 and All-Share AIM indices in ‘Sustainability Appointments in Industry: Approaches to leadership and governance' shows that in the FTSE 250 the majority of current sustainability officers[2] have been in role for less than two years. Coupled with multiple challenges facing organisations, it could be extremely difficult for these officers to deliver on sustainability goals.
“Given the current economic environment, there is a risk that sustainability will take second place. It will be challenging for sustainability officers to keep sustainability high on the agenda, and they could find themselves competing with other functional leaders in the C-suite who have different requirements and priorities,” comments Claire Lauder, Managing Partner and leader of the research, Boyden UK & Ireland.
“The good news is that there is a much greater social, economic and corporate mandate for sustainability leaders. They must leverage relationships with the board and the CEO to maintain the focus on sustainability, because sustainability and business imperatives are now inextricably linked”.
As corporate leaders compete for resources, the board, CEO and sustainability officer need to maintain a sharp focus on gathering the right people together to deliver on sustainable business goals.
“The challenge for businesses making physical products with complex supply chains is that increasingly the sophistication of talent needed is greater and it is harder to find executives with the right level of experience. It’s important to get the right resource, or combination of resources, leveraging executive search, interim management and expert consultants to move to the tactical implementation stage initiated at COP27.”
Analysis of industrial companies in the FTSE 250 reveals that 92 percent have a dedicated sustainability officer, 80 percent of whom report to the board, and 75 percent of whom have been in post since 2020. All have board committee oversight: 31 percent sustainability, 21 percent ESG, 12 percent health & safety, 8 percent risk or audit & risk or executive committee, 18 percent other committee.
Analysis of industrial companies in the All-Share AIM Index, which has lower corporate governance provisions than the FTSE 250 Index, reveals 39 percent have a dedicated sustainability officer, 42 percent of whom have been in post since 2020. Just 14 percent have board or executive committee oversight of sustainability.
Since their earliest appointment in 2010, sustainability officers have changed from being science or climate experts driving awareness and understanding of our impact on the planet, to senior-level corporate operators who can hold their own in the C-suite, influencing strategy and operations.
Claire Lauder says: “These leaders often have a suite of skills that stretches across finance, operations, marketing and communications. They are omni-talented with gravitas and expertise in how to enable an organisation to deliver on sustainability targets”.
Organisations are increasingly turning to interim management solutions to access the right level of experience and expertise.
“Interim managers are change experts and change evangelists. They are proven at driving business change through people,” says Claire Lauder. “The interim talent pool includes health and safety executives who became increasingly strategic, working to reshape behaviour cultures and inject functional expertise.
“The strategic supply chain is probably the most complex area to focus on; supply chain experts who now review sustainability credentials with new suppliers in the same way they review cost and risk. Harnessing executive interim talent to drive through new ways of working is often a rapid way to kick start change.”
About the research
The research analysed 60 industrial companies in the FTSE 250 and 108 in the FTSE All-Share AIM indices to ascertain the extent to which organisations are investing in dedicated sustainability roles, how organisations are approaching governance, and the evolving regulatory environment in which they operate.
[2] The use of ‘sustainability officer’ is generic, referring to individuals who have a sustainability-type role in their organisation; distinct from the formal denomination of Chief Sustainability Officer (CSO).
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