Constellation Research's 2023 ESG 50 list has a diversity of titles that highlight how companies are responding to environmental, social and governance (ESG) demands from different angles.
And those demands are increasing. Institutional investors have been pushing companies to detail carbon emissions and climate risks. In addition, a pair of sustainability regulations in Europe are impacting operations or soon will. The EU's Corporate Sustainability Reporting Directive (CSRD) is expected to be incorporated. The CSRD imposes sustainability reporting for all publicly listed companies and all corporations with more than 250 employees and more than €40 million in revenue or €20 million in total assets.
The CSRD will concern 50,000 EU companies, which will have to integrate sustainability reporting into management reports with a mandatory external audit.
Individual countries within the EU are also expected to have sustainability regulations such as the German Supply Chain Due Diligence Act (GSCA), which took effect Jan. 1, 2023, for companies that employ more than 3,000 people. Companies that employ more than 1,000 people will need to comply from Jan. 1, 2024.
Given that backdrop--along with companies signing up for the Science Based Targets Initiative (SBTi)--it's no surprise that more than half of the Constellation Research 2023 ESG 50 list is comprised of titles such as Chief Sustainability Officer (CSO) or EVP/SVP/Director and CSO.
Inflation and the need to become more efficient are also helping sustainability efforts. Companies that are more efficient save money and advance sustainability goals.
CSOs are often one member of a broader committee or team that oversees all of ESG at enterprises such as diversity, equity and inclusion. After CSO titles, corporate citizenship, corporate responsibility, and public/environmental affairs titles are the next most popular.
Doug Henschen, VP and Principal Analyst at Constellation Research, put the ESG 50 together. He said the rise of the CSO highlights the maturity of sustainability efforts.
"I'm particularly excited to see of smattering of titles such as ‘Chief Sustainability and Strategy Officer’ or “Chief Sustainability and Strategic Business Development Officer,’ as this hints at the mature perspective that sustainability is best achieved when it’s a strategic objective from the start rather than something you just report on after the fact. Organizations will increasingly recognize that sustainability, performance improvement and profitability can all go hand in hand when it’s a priority considered in all business decisions."