Chief Sustainability Officers (CSOs) are rising to our world’s most pressing challenge: climate change. But as pressure and calls to action for sustainable transformation and decarbonization become more pronounced, CSOs cannot act alone—it is crucial that they are well-supported in their role of implementing sustainability initiatives within their organizations.
As a recent global survey of CSOs conducted by Egon Zehnder revealed, many stakeholders lack a clear understanding of a CSO's role. But to truly empower this executive to spur change, it is important for business stakeholders to comprehend the complex yet critical role that CSOs play in achieving sustainability goals.
To explore how CSOs are leading climate action within their organizations, we hosted a panel discussion at the One Earth Summit 2024 in Hong Kong, titled “Leadership, Strategy, and Action towards Net Zero,” where CSOs and Investors shared their experiences and milestones in achieving sustainability goals globally. Moderated by Catherine Zhu, the panel featured the following leaders:
- Alpha Lau, Director General, InvestHK
- Amy Fong, Managing Director, Sustainability and Strategic Initiatives at FountainVest
- Esther An, Chief Sustainability Officer, City Developments Limited
- John Haffner, Deputy Director of Sustainability, Hang Lung Properties Limited
- Mark Harper, Group Head of Sustainability, Swire Group
In this article, we examine the main takeaways from the discussion:
Advancing Sustainability Policies: Everyone Has a Role to Play
In the push for sustainability, the resounding message is clear: everyone bears a role in driving change. Different market participants all have differing, but equally important, roles to play in advancing sustainability.
Governments and regulators are increasingly supporting sustainability efforts through measures such as green bonds, sustainability reporting, data reporting initiatives and further supporting innovation through subsidies and SDG (sustainable development goals) innovation loans to pave the way for new sustainable solutions. For example, Alpha Lau, Director General at InvestHK, highlighted the Hong Kong government’s commitment towards cultivating sustainability development through the launch of various initiatives including the tokenized digital green bond and the Green Fintech proof-of-concept subsidy scheme aimed at promoting the development of technological solutions and provide early-stage funding support to companies with pre-commercialized innovative green-fintech solutions.
Businesses are integrating sustainability, green finance and technology into their operations, including ESG disclosures, risk modelling and carbon credits. Investors and asset owners also have an important role to play in the wider push for sustainability while balancing profitability with sustainability targets. For example, Amy Fong, Managing Director, Sustainability and Strategic Initiatives at FountainVest, highlighted that as private equity general partners, the organization is uniquely positioned to steer portfolio companies towards sustainability targets through governance, while navigating the priorities of their limited partners around the world with differing views towards ESG.
In addition to advancing governance, we have also seen businesses tie remuneration back to emissions and other sustainability metrics. This ensures that sustainability goals are not just a box-ticking exercise but are integrated into the core business strategy. By linking executive compensation to sustainability targets, businesses can create a culture of accountability and drive sustainable transformation from the top down.
Furthermore, it is important for companies to collaborate with external stakeholders such as suppliers, customers, and investors to achieve sustainability goals. This includes engaging with suppliers to ensure sustainable practices and materials are adopted, partnering with customers to reduce waste and emissions, and working with investors to align sustainability goals with financial objectives.
Mark Harper, Group Head of Sustainability at Swire Group, emphasized the importance of creating operating environments in which businesses can achieve their targets. This includes setting broad global targets, implementing internal carbon pricing which is effectively an internal ‘carbon tax’, ensuring governance and accurate sustainability reporting. Esther An, Chief Sustainability Officer at City Developments Limited, a Singapore grown multinational commercial property operator and one of the pioneers in the region for sustainability reporting, also highlighted the evolution of sustainability over the last two decades and the importance of integration, innovation, investment and its overall impact in sustainability practices.
How Companies Are Embracing Sustainability through Operations: A Case Study
Beyond overall governance, there’s another lever to advance sustainability: embracing it through company operations, including through partnerships and collaborations.
John Haffner, Deputy Director of Sustainability at Hang Lung, a leading Hong Kong headquartered property developer, underscored the importance of governance in sustainability efforts and discussed different approaches to sustainable transformation through partnerships with different external parties including with key suppliers, tenants and customers. As a real estate developer, the company has embraced green building measures and is increasingly engaging with suppliers to source sustainable practices and materials. The company has also joined the SteelZero initiative to support the innovation and transition to sustainable steel and low carbon bricks in construction. Renewable energy initiatives, including utilization of renewable energy to cover significant energy needs and reduce scope two emissions, are also used.
Transforming organizations to fully embrace sustainability is as urgent as it is complex. As we learned from the panel discussion, Chief Sustainability Officers are tapping into their curiosity to find creative and innovative solutions in their respective industries. But more than single actions, driving this critical work is a movement, one that requires collaboration and leadership from all stakeholders, both internal and external. Empowering the CSO starts with understanding the CSO, and we hope that the stories shared by the leaders during the panel can inspire many other executive across all areas to renew their outlook on this critical function—and join them in creating a more sustainable future for all.
