Robot portrait of the CSR manager

I) CSR: an increasingly central place in companies

Previously, the sustainability issue was disconnected from important business decisions and generally revolved around minimizing risks to the company’s safety or reputation. Those days are over. Today, business interest in environmental, social and governance (ESG) issues is growing. The French leaders interviewed in the 26th edition of the Global CEO Survey PwC place ESG (Environmental, Societal and Governance) risks at the top of the list of threats over the next 5 years. According to PwC’s 2022 Global Investor study, nearly 80% of the 325 investment professionals surveyed highlighted ESG risks as a determining factor in their investment assessments. Also, nearly half would opt out of companies that they perceive are not meeting their ESG commitments. The demands of consumers, but also of employees on this aspect are growing. The ESG question is spreading to all stakeholders in the company and is gaining in depth. Yet, many executives are still uncertain about what to do about these ESG topics. Often, solving ESG issues is so complex - and the issues covered so vast - that executives simply don’t know where to start. This is where the Chief Sustainability Officer (CSO) or CSR Director can make a difference. Increasingly, CSR leaders are playing a growing role in the organization and are making their voice heard not only in compliance, but also in HR, strategy and finance. While not a “silver bullet” in itself, a well-established and recognized CSR leader within the company can have a real impact: By giving meaning to all ESG dimensions; By accelerating a sustainable transformation. The role of the Chief Sustainability Officer will undoubtedly grow as organizations continue to place ESG at the heart of their business.

 

II) The role of CSR managers today

By studying the role of the Chief Sustainability Officer in 1640 listed companies in its study Empowered Chief Sustainablity Officer, Strategy& draws the robot portrait of the CSR manager in 2023, in the light of their changes in positions in companies, their initial training and their position within the structure of the organization.

A) The CSR manager: a role still too little formalized and partial

Just under one-third of the companies studied had a formal CSR role, while one-fifth of the companies had no CSR at all. A large number of companies have CSR managers whose mandate and scope of duties are reduced, depending on their role or position in the company hierarchy. Also, there are a large number of sustainability managers who do not understand the issue of sustainable development in its entirety, but who work only on the aspect of corporate social responsibility (CSR) or HSE issues (Health, safety and environment).

 

B) COMEX membership not yet systematic

At present, too few Chief Sustainability Officers have sufficient access to the Board of Directors, as about half of them are at two or more hierarchical levels of EXCOM members. They therefore do not have the influence necessary to engage in deep transformation on these sustainability topics. However, this role is changing, since they were only 9% members of the C-suite in 2016, against 28% in 2021.

 

C) Inventory by territory and typology of activities

North America and Europe seem to be the most advanced, with 48% and 35% of CSR managers respectively having a complete and defined role within the companies studied. 57% of companies in Europe have CSR managers with reduced functions, and only 9% have not appointed a CSR manager. Globally, nearly half of companies have a CSR manager with limited functions.

Companies in the consumer goods sector are the ones that have invested the most in the CSR function, since 50% have a CSR manager with expanded functions. Media and social networks pay particular attention to sustainability issues, particularly in the food and clothing sectors. This attention is having a growing impact on companies in these sectors, which is partly why they have taken up the subject more than others.

Companies in the chemical (45%), oil and gas (42%) sectors also have a high percentage of CSR managers with formally identified functions - an indication of the growing weight that the ESG holds among investors, governments, media and NGOs, increasingly looking at the operations of these companies on these aspects.

It is the engineering and e-commerce sectors that close the pack with 17% and 14% respectively of CSR managers with an extended mandate.

This gap in the expertise of CSR managers is about to change: in 2021, the appointment of CSR managers has tripled compared to 2020. This trend began in 2018, when issues such as climate or equality began to influence the decision of investors and executives. This trend has accelerated as a result of the Covid-19 pandemic. Increasingly, companies have prepared their business for the upcoming ESG challenges: they have developed sustainability expertise through internal hiring and promotions.

III) Major trends in the role of the CSR manager

It is clear that companies that do not have CSR managers are becoming increasingly rare and these latter are gaining influence and importance. How is this broad sustainability expertise integrated into the organisation?

Here are the main trends that shape the changing role of CSR managers.

 

A) Move from a back office compliance mission to a central role in the company

Faced with the growing expectations of stakeholders and under the influence of the regulator (e.g. PACTE Law in France), organizations have begun to take a closer look at their sustainable footprint and their raison d'être. To facilitate this process, the CSR manager must have a thorough understanding of what is happening in all functions of the company. In contact with a large number of internal functions, his ability to build relationships of trust is essential. Today’s CSR leader must be able to understand the interdependence of all ESG issues, which infuse into all dimensions of the organization. It must be able to deal with this complexity, to demonstrate a synthesis to prioritize the information afterwards and to arrive at a pragmatic set of actions to be implemented, all without being overwhelmed by the extent of the challenges.

B) Embedding ESG issues across the organization

By allowing the CSR Director to sit on the Board of Directors or by reporting directly to the Executive, the Executive Team focuses and develops on ESG issues. With this positioning within the management team, the CSR manager influences the company’s strategy and operational choices, by informing decisions in light of ESG issues.

 

C) Make ESG a key topic for the company’s board and management

The role of the Chief Sustainability Officer is also evolving as organizations become more aware of sustainability. Until now, most companies were at the beginning of their journey, with little ESG expertise within the organization. As companies place sustainability in their strategy and operations, their expertise and knowledge around ESG must spread throughout the company. The CSR manager and his team, as subject matter experts, are true ambassadors of the subject, internally to acculturer other employees but also externally, by leading partnerships and alliances allowing them to support a sustainable transformation.

D) The growing importance of ESG reporting

The non-financial reporting landscape is changing. The reasons are simple: increased investor expectations around ESG and willingness of companies to show their progress on this topic. This awareness makes access to finance or insurance more difficult for companies that do not play the transparency game. Pressure on companies on the ESG aspect of non-financial performance reporting is growing, driven by regulators (e.g. Creation of the International Sustainability Standards Board).

The job of the CSR Director (or Chief Sustainability Officer) has constantly evolved and transformed in recent years, under the joint effect of an awareness of companies and a shift to action on these topics. The professions and skills related to CSR are growing as ESG issues spread within organizations.

Companies now have a Chief Sustainability Officer, but these officers complement their team of CSR lawyers, circular economy managers, data scientists and climate specialists to understand ESG issues in their entirety.