Reasons Why Organisations Are Hiring Sustainability Leaders

Welcome to another edition of the Sustainable Intelligence newsletter.

This is where I try to explore the intersection of artificial intelligence and environmental sustainability. My mission is to share my observations across these core themes: AI for Good, Ethical AI, Sustainable AI and AI in Sustainability. I hope to inform, inspire and engage readers interested in the potential of AI to drive positive change for both people and the planet.

Here’s what’s in stock for you today:

• News Bite: CBRE Strengthens Global Sustainability Advisory.

• Deep Dive: Reasons Why Organisations Are Hiring Sustainability Leaders.

• Tech Trend: AI's Rising Costs: Apple Sets a Pricey Precedent.

News Bite: CBRE Strengthens Global Sustainability Advisory.

CBRE has greatly expanded its sustainability advisory services in the Asia Pacific (APAC) region through the acquisition of Paia Consulting, a specialized sustainability consulting firm located in Singapore. This strategic move doubles CBRE's resources in the area, enabling the company to provide stronger ESG (Environmental, Social, and Governance) solutions to both occupier and investor clients.

The President of CBRE's Advisory Division for India, Southeast Asia, Middle East, and Africa highlighted the regional significance, stating, "This acquisition will affect the entire APAC region. As businesses become more aware of sustainability and face stricter regulations, they will be driven to develop and show progress in their sustainability strategies. Our combined team's efforts will extend across our office network and our clients' global operations, giving them access to the best practices worldwide."

Deep Dive: Reasons Why Organisations Are Hiring Sustainability Leaders

In recent years, the role of sustainability leaders—be it managers, directors, or chief sustainability officers—has exploded across industries. But what’s driving this trend? Why are companies so eager to bring in these green champions? The reasons range from genuine commitments to making a difference to more superficial, image-focused motivations. Let’s dive into the many reasons why organizations are hiring sustainability leaders and look at some real-life examples that illustrate these motivations.

1. Regulatory Compliance: Playing by the Rules

For many companies, hiring a sustainability leader is about staying on the right side of the law. Environmental regulations are becoming stricter, and no one wants to be hit with hefty fines or legal troubles. A sustainability leader ensures that the company’s operations align with current regulations and helps navigate the complex landscape of environmental laws.

In 2021, British multinational retailer Marks & Spencer appointed Lucinda Langton as Head of Sustainability at M&S Food with a specific mandate to drive sustainability efforts which includes accelerating the sale of vegan and vegetarian products, achieving 100% packaging recyclability by 2025, and working towards making the company a net zero business by 2040. This move was partly in response to increasing regulatory pressures and a need to stay compliant with evolving environmental standards.

2. Corporate Social Responsibility (CSR): Doing Good and Doing Well

CSR has become a buzzword in the corporate world, and for a good reason. Consumers and employees alike expect companies to give back to society. Hiring a sustainability leader can be a powerful way to strengthen a company’s CSR initiatives, making sure they’re not just talking the talk but walking the walk.

Unilever has been a trailblazer in this space. When they hired Rebecca Marmot as Chief Sustainability Officer in 2019, it was a clear signal of their commitment to embedding sustainability in everything they do. Unilever’s focus on sustainable living plans and CSR initiatives has not only boosted their brand reputation but also attracted consumers who care about ethical practices.

3. Risk Management: Safeguarding the Future

Sustainability isn’t just about being green; it’s also about managing risks. Environmental issues like climate change, resource scarcity, and pollution pose significant risks to businesses. A sustainability leader helps identify these risks and develops strategies to mitigate them, ensuring the company’s long-term survival.

Nike hired Jaycee Pribulsky earlier this year as their Chief Sustainability Officer to address the risks associated with their global supply chain, particularly in regions vulnerable to climate change. This move was essential in safeguarding their production processes and ensuring they remain resilient in the face of environmental challenges. Although Nike has reportedly lost 30% of employees who worked primarily on sustainability within the company, due to layoffs, voluntary departures or role transfers, Jaycee says Nike is still committed to sustainability.

4. Cost Savings: Going Green to Save Green

One of the more practical reasons companies hire sustainability leaders is to cut costs. Implementing energy efficiency measures, reducing waste, and optimising resource use can lead to significant savings. A good sustainability leader can identify these opportunities and make the business case for green initiatives that also save money.

When Walmart appointed Kathleen McLaughlin as Chief Sustainability Officer, they were serious about reducing costs through sustainability. Under her leadership, Walmart has made strides in energy efficiency and waste reduction, which have contributed to lowering operational costs while boosting their green credentials .

5. Innovation and Growth: Sparking the Next Big Thing

Sustainability can be a catalyst for innovation. By thinking sustainably, companies can develop new products, services, or business models that not only benefit the environment but also open up new markets and revenue streams. A sustainability leader is often at the forefront of this innovation drive.

Patagonia is famous for its sustainability-driven innovation. When they hired Ryan Gellert as CEO of Patagonia Works, they emphasized the company’s mission to innovate around sustainable practices. This includes their famous “Don’t Buy This Jacket” campaign, which encouraged consumers to think about the environmental impact of their purchases.

6. Public Relations (PR): Looking Good in Green

Let’s face it, some companies hire sustainability leaders more for show than substance. The idea is to boost the company’s image by appearing environmentally conscious, even if the actual commitment is skin-deep. This is where the term “greenwashing” comes into play.

While it’s tricky to point fingers, some critics have questioned the sustainability efforts of certain fast fashion brands. For instance, H&M has a Conscious Collection, and they’ve hired sustainability experts to back these efforts. However, some argue that these initiatives are more about PR than genuine change, given the overall environmental impact of fast fashion.

7. Investor Expectations: Keeping Shareholders Happy

Investors are increasingly looking at Environmental, Social, and Governance (ESG) criteria when making investment decisions. Hiring a sustainability leader can help a company meet these expectations, making them more attractive to potential investors.

BlackRock, one of the world’s largest investment management firms, has been vocal about the importance of sustainability. They have had a series of changes in their sustainability organisational unit, but they appointed Helen Lees-Jones as the Global Head of Sustainable and Transition Solutions to align the firm's sustainability and transition strategy, driving cross-functional change, supporting client and external engagement, powering product ideation, and embedding sustainability expertise across the firm. This move was largely driven by the growing investor demand for ESG-focused investments.

8. Brand Reputation: Building Trust and Loyalty

A strong commitment to sustainability can enhance a brand’s reputation, building trust with consumers, employees, and partners. A sustainability leader helps ensure that the company’s actions match its words, fostering loyalty and a positive image.

IKEA has long been a leader in sustainability. With the appointment of Lena Karen Pflug as their Chief Sustainability Officer, IKEA doubled down on its commitment to sustainability, which has been a key driver of their brand reputation. Their initiatives, like sourcing all wood from sustainable sources, have reinforced IKEA’s image as a responsible company as a more sustainable and environmentally responsible company.

Wrapping It Up

Organisations hire sustainability leaders for a wide range of reasons, from genuine efforts to improve the world to more image-focused motivations. Whether driven by regulatory compliance, cost savings, or the need to look good in green, the role of the sustainability leader is here to stay. And while some companies may be more committed than others, the overall trend is a positive one: sustainability is moving up the corporate agenda, and that’s something we can all get behind.

So, the next time you see a company appointing a Chief Sustainability Officer, take a closer look. Are they in it for the planet, or just the PR? Either way, the fact that sustainability is getting so much attention can only be a good thing for our collective future.

Tech Trend: AI's Rising Costs: Apple Sets a Pricey Precedent

Apple's move to potentially charge up to $20 per month for its upcoming AI features suggests a trend where advanced AI functionalities may become a premium offering. As AI development costs rise, other tech companies might follow suit, making AI-driven services more expensive. This could lead to a market where access to cutting-edge AI tools is increasingly tied to higher subscription fees, potentially limiting accessibility to these innovations for the average consumer.

Sustainability leaders aiming to integrate AI into their initiatives—from net zero reporting to energy optimization—must carefully evaluate the financial implications of AI applications. While AI can significantly enhance efficiency and accuracy, the costs associated with these technologies are rising, as seen in recent industry trends. It’s essential to conduct a thorough cost-benefit analysis to ensure that the investment in AI genuinely delivers value and supports long-term sustainability goals without straining budgets. Balancing innovation with financial prudence is key to making AI-driven sustainability efforts worthwhile.

That’s all I have for you today.

That’s all I have for you in this edition of Centre for Sustainable Intelligence.

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Emeka Ogbonnaya