For more than a decade, the biggest companies in the world, from Coca-Cola to AT&T, have had chief sustainability officers on staff. Part of the CSOs’ job has included running various pilot programs—whether producing a few thousand gallons of sustainable aviation fuel or replacing 20 trucks in a city with cargo bikes.
Now, businesses want to scale and speed up these innovations, realizing that integrating ESG (environmental, social, and governance issues) into everyday practices has proven to be financially lucrative. That requires a lot more money—and the authorization of the chief financial officer, who appears to be increasingly overseeing ESG practices as they become more mainstream. “The CFO’s job is signing that billion-dollar check,” says Karthik Balakrishnan, the cofounder and president of Actual, a software company that allows businesses to run simulations of how sustainability projects might play out in real life.
Depending on the company, sustainability leadership has historically fallen on a variety of departments, from marketing, to legal, to the CEO. Many global organizations have CSOs, but only 28% of them are in the executive suite, creating a gap in communication to the top. CSOs are tasked with a lot, from compliance, to research and innovation, to training the workforce on ESG. But one thing they they don’t have is control of a company’s purse strings.
In the past, the CFO has been involved in sustainability as the bearer of bad news: “To shoot down the CSO’s request for funds,” says Tensie Whelan, founding director of the Center for Sustainable Business at NYU Stern.
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