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The playbook for the sustainability executive is still being written. Whether you’re new to sustainability or an industry veteran, the world around us is changing fast.
As we publish the eighth biennial State of the Sustainability Profession report, the rise in regulations in the U.S. and abroad is moving the communication of a company’s sustainability-related activities from a voluntary exercise to a mandatory requirement.
General counsels and CFOs are becoming more involved as sustainability data needs to be assured to the same extent as financial data. New roles, such as the ESG controller, are being created to ensure regulatory compliance.
First published in 2010, the State of the Sustainability Profession 2024 looks at the evolution of the role of the sustainability leader in today’s business world. We conducted an in-depth online survey of the Trellis Intelligence Panel in late 2023 to
find out key trends in the field, including how much sustainability executives earn, where they work and what they do in the course of their jobs, and compare the findings to prior years.
The results published here are based on 1,185 respondents, 75 percent of whom work at large organizations, with revenue greater than $1 billion.
Among the key findings:
- The number of sustainability employees at a given company is increasing
- General counsels and CFOs are becoming more involved in sustainability, and more often sustainability teams are reporting into them
- Sustainability executives are also rising in seniority within their organizations
How companies are staffing the sustainability response
Headcount continues to increase within sustainability teams at large corporations as 74 percent of respondents reported increased staffing over the past two years, just 2 percentage points lower than 2022. Healthcare saw the biggest increase as 88 percent of respondents reported adding employees to their team.
Headcounts are increasing in other departments as well. We asked whether one or more dedicated sustainability resources were embedded within various functions. The biggest increases show up in the finance and legal departments. The number of companies embedding resources in the finance department grew by 11 percentage points. Companies adding sustainability resources to their legal teams grew by 14 percentage points.
How companies are restructuring to respond to increased sustainability regulations
Changes in the corporate sustainability field are also apparent when you look at how within a corporation sustainability is structured.
The increase in pending regulations has caused several companies to shift their reporting structures to the general counsel’s office. As recently as two years ago, just 7 percent of survey respondents indicated their team reported to the legal department.
“>That has since doubled and this trend will likely continue.
Ten years ago, it was likely that you would find a CSR team reporting into the corporate affairs department or an environmental team reporting into the environmental health and safety group.
More senior sustainability roles
Sustainability executives are also rising in seniority within their organizations. The number of high-ranking sustainability executives who report directly to the CEO has risen from 22 percent to 30 percent in the past two years. The industries where this is most prominent are construction, building and real estate, where 39 percent of sustainability executives report to the CEO, and the consumer goods segment, where 40 percent report to the CEO. In contrast, only 12 percent of retail and 17 percent of technology sustainability leaders report directly to the CEO.
Forty-nine percent of sustainability leaders report to an executive who reports to the CEO while only 4 percent of respondents can count several layers between them and the CEO.
The elevated role of the sustainability leader doesn’t stop with the chief executive. Thirty-one percent of respondents report that the board of directors is briefed on an annual basis about the sustainability program’s risks and achievements. Thirty percent brief the board quarterly.
