The EU’s proposed Corporate Social Responsibility Directive (CSRD) introduces new sustainability reporting rules for listed or large companies. Reporting, though, is only part of the story. The CSRD will also require companies to look at their processes, roles & responsibilities. This will inevitably have repercussions on the role of the sustainability manager.
This blog looks at what CSRD means for sustainability managers and their position in the company. If you think it’s only more reporting, then you better guess again (or read on).
It’s time we start seeing other people
The CSRD intends to bring financial and sustainability reporting to the same level. As a result, more people will need to participate in sustainability reporting. Sustainability cannot stay within the realm of the sustainability manager. It needs to get out there and meet some new departments.
This means “integration of sustainability in the organisation” in consultancy speak. As a result, CSR managers will have to work even more closely with other departments as those start working on sustainability.
Shooting for the stars or going underground?
CSRD represents risks and opportunities for the position of the CSR manager.
CSRD helps the sustainability manager by putting sustainability higher on the agenda. This should make it easier to start new projects and get funding. It also creates the potential for increased visibility for the role of the sustainability manager as more people within the organisation get involved on the topic. Some companies have already elevated the sustainability manager role by creating the Chief Impact Officer position.
These opportunities only apply if the sustainability manager can remain at the centre of sustainability in the company. As other departments start working (more) on it, they might take over the lead. For example, some want to rebrand the ‘financial’ department to the ‘value’ department. We see in practice that cooperation does not always come naturally. For example, the CFO in one company organised a CSRD meeting but forgot to invite the sustainability manager.
Much will depend on the profile & experience of the current sustainability manager. Junior profiles are more likely to fade to the background. However, more senior sustainability managers can take a stronger position and establish themselves as the centrepin of sustainability in the organisation.
Rules for what we can do with other people
The more people work on something, the more need for coordination and basic ground rules. That’s why the CSRD requires companies to ensure they have clear responsibilities and processes. For example, who is responsible for the data collection for your carbon footprint? What are the steps you take to select our material sustainability topics? Who will arrange the third-party assurance?
The CSRD does not let companies completely free in allocating responsibilities. For certain key matters, there is one place where the buck has to stop. Just like for critical financial matters, the Board is accountable for crucial sustainability matters, for example, the company’s sustainability strategy. As a result, sustainability managers are likely to work more closely with the Board.
We need to learn from each other
Like any healthy relationship, all parties must understand each other. If sustainability managers and departments are to work together, they need to understand what drives each other.
This is not so easy. Not everyone in a company might know everything there is to know about sustainability. Equally, sustainability managers can be unaware of what their colleagues do.
Open communication will, therefore, be crucial for solid cooperation. Sustainability managers need to understand the business to engage with other departments. Equally, departments need to boost their understanding of sustainability and how they can contribute to it.
CSR manager as a spider in the web
We saw that CSRD can help establish or formalize the role of the sustainability manager. However, it is important that sufficient weight is given to this role to ensure sustainability is coherently and comprehensively tackled within the whole organization.
Therefore, we see at least the following responsibilities for the CSR manager:
- Coordinator & stimulator
- Coach & integrator
As other departments get more involved, somebody will need to coordinate all that work. Sustainability managers are very well positioned to take up that role. Moreover, they can stimulate their colleagues to work on sustainability and go for sufficiently ambitious targets. E.g. doing something is not the same as doing no harm (or even having a positive impact).
Sustainability managers also need to take a coaching role to help colleagues understand what sustainability is. E.g. on the relative importance of human rights in the supply chain versus going paperless.
Moreover, sustainability managers can help translate the sustainability strategy into the daily work of their colleagues. For example, is procurement using sustainability criteria when selecting suppliers? Creating this functional engagement is crucial for reaching an organisation’s sustainability targets. What’s more, we see this increases staff motivation.
Don’t postpone till tomorrow what you can do today
Time will tell how the role of the sustainability manager will evolve and how different departments will engage with sustainability. CSRD will not start tomorrow, this year, or even next year. So the compliance manager will tell you there is still time to figure everything out. As a sustainability manager, however, you might want to raise your ambition and start engaging with your colleagues sooner.
Willem Roekens, consultant at TheRockGroup
Get in touch: firstname.lastname@example.org