Executives focused on sustainability and impact talk about their expanding roles and how collaboration drives their work.
Clockwise from left: Peggy Brannigan, MBA ’87; Justina Lai, MBA ’09; and Randy Burns, SEP ’23 | All illustrations: Israel Vargas
About 15 years ago, a new position appeared on the org charts of big companies like Coca-Cola, AT&T, and Dow: the chief sustainability officer. Since then, this role has gone from a novelty to a fixture in leadership teams, with its numbers exploding in the past few years.
In 2018, eight publicly traded U.S. companies named their first CSOs; in 2022, more than 40 did, according to the Weinreb Group, a sustainability placement agency. PwC reports that global companies appointed almost as many CSOs in 2020 and 2021 as they did in the previous eight years combined.
Chief impact officers, which originated in the nonprofit world, have also begun popping up in the for-profit one (most famously in the person of Prince Harry, who was appointed CIO of a coaching and mental health startup in 2021). In practice, the difference between the two titles is slim, and their proliferation stems from the same underlying movement toward focusing on environmental, social, and governance (ESG) goals and diversity, equity, and inclusion (DEI) efforts.
Nonetheless, only a fraction of corporations have adopted these positions, and their relative newness raises questions about their future. If a company reports disappointing performance, will directors and shareholders blame the CSO or CIO, especially since sustainability and impact efforts are often believed to impose additional costs?
William Barnett, a professor of organizational behavior at the GSB and director of the Stanford Initiative on Business and Environmental Sustainability, says that while the occupants of these positions may indeed take some heat, they’re here to stay — for the simple reason that companies realize they need them to survive. “This isn’t people behaving like saints. This is smart business,” he says. “Billions of dollars are going to go into the creation of a sustainable economy. People who aren’t thinking that way are 20th century, and it’s the 21st century now. So their organizations will be left behind.”
Initially, most CSOs sat in marketing and communications, suggesting that they were meant to convey a positive story about corporate responsibility rather than shape strategy or behavior. That impression was heightened by a dearth of resources and quantifiable outcomes that led some observers — including David Larcker, a professor emeritus of accounting at the GSB who directs the Corporate Governance Research Initiative — to wonder whether CSOs might be little more than figureheads who lacked the power to drive tangible outcomes. “I’m not criticizing the focus on this,” Larcker says. “I’m just raising a question: Is this just a little bit of window dressing, or is this real?”
Recently, however, the role of chief sustainability and impact officers has undergone a transformation. A recent Harvard Business Review study found that CSOs have been acquiring greater authority, with more involved in shaping corporate strategy and addressing ESG issues that affect financial performance. A 2023 survey by the Weinreb Group found that three-quarters of U.S. CSOs now belong to their companies’ executive leadership teams. They manage more direct reports than their predecessors, engage more with their boards, and increasingly see sustainability functions spread across their organizations — the kinds of things that Larcker says help distinguish positions that are “really key” from ones that are merely “nice to have.”
The Influencers
For more insight into the evolution of these roles and their staying power, Stanford Business spoke with three executives at the forefront of sustainability and impact: Peggy Brannigan, MBA ’87, the director of global environmental sustainability at LinkedIn; Randy Burns, SEP ’23, the chief sustainability and corporate affairs officer at Ohio-based bottle manufacturer O-I Glass; and& Justina Lai, MBA ’09, the chief impact officer and shareholder at Wetherby Asset Management, a wealth management firm headquartered in San Francisco.
All three have their own dedicated staff and draw on the expertise and resources of cross-functional teams whose members hail from every corner of their organizations. “I intentionally didn’t try to build a huge central team because we want to have sustainability embedded across the rest of the company,” says Brannigan, who coordinates with sustainability leads sprinkled across LinkedIn’s procurement, data center, and workplace design, construction, and operations teams. She formerly reported to the CFO; her team recently moved into the legal department (following the lead of LinkedIn’s parent company, Microsoft).
Burns is on O-I’s global leadership team, which is responsible for strategic planning, and reports directly to his CEO. Lai reports to both the CEO and CFO.
The org-chart authority these sustainability and impact professionals wield may not be their most valuable asset, however. More than anything, they view themselves as influencers and connection-builders who must win the cooperation of various partners — customers and suppliers, employees and board members — if they are to make their businesses more sustainable and generate value for all their stakeholders, from the investors who pump capital into their companies to the people who live in the communities where they operate.
That is very much an exercise in the collaborative, team-building skills that all three developed throughout their careers. Lai started out in investment banking and private equity before getting in on the ground floor of impact investing at the Rockefeller Foundation. Brannigan worked for Wells Fargo and Apple and ran her own strategic consulting firm before launching her sustainability career in Europe. And Burns is a former litigation lawyer who served as outside counsel to O-I for many years before coming in-house.
“You cannot do sustainability without collaboration,” says Burns, who also leads global government affairs and corporate communications at O-I. “You cannot dictate it; you cannot force it; you have to nurture it. We can’t achieve our sustainability goals without the collaboration of our suppliers and employees, and our customers can’t achieve their sustainability goals without our collaboration.”
Source: Weinreb Group
Not One Size Fits All
Those goals can vary widely from company to company, as can the mandates of the executives charged with achieving them.
Brannigan, for example, is focused entirely on environmental sustainability. The networking site has pledged to go carbon-negative, water-positive, and zero-waste by 2030. To meet those commitments, she is driving initiatives to use green energy and low-carbon concrete in the company’s construction projects, increase the use of recycled water and low-irrigation landscaping on its campuses, and reduce waste in all forms — from food scraps to construction debris and retired computer equipment. “We are now making our own oat and almond milk on-site,” she says with obvious delight.
At the same time, Brannigan is working with LinkedIn’s product team to help users take climate action. Her team has established a resource hub where small and medium-sized businesses can learn how to set and pursue sustainability goals, in part by taking courses like “Fundamentals of Sustainable Supply Chain Management” and “Greenhouse Gas Emissions Accounting.” They have also created a green jobs collection to make it easier for job seekers to find work with a sustainability focus.
At O-I, sustainability encompasses social impact and DEI. “Our view of sustainability is very holistic,” Burns says. Yet as a global glass manufacturer with 69 plants in more than 20 countries, environmental issues inevitably loom large. The one that looms largest, Burns says, is energy. Although glass is almost infinitely reusable and recyclable, making the stuff and moving it from place to place involves burning lots of fossil fuels. Consequently, making O-I more sustainable — and more efficient, resilient, and profitable to boot — requires not only capturing and recycling more of the glass that is already out there but also shifting toward renewable energy and low-carbon manufacturing processes.
O-I has developed a new modular furnace system called MAGMA that will allow the company to build smaller facilities closer to customers and sources of renewable energy. The technology will also reduce water usage, minimize emissions, and allow the use of even more recycled content. At the same time, the firm is working on a program that aims to produce lighter bottles, thereby saving raw materials and reducing the carbon footprint generated through shipping and transport.
Burns and his team are also building closed-loop systems that allow customers to return glass scrap directly to O-I rather than consigning it to the broader recycling system. The circular glass economy strengthens the company’s supply chain while offering customers a zero-waste solution.
Lai’s role as chief impact officer at Wetherby grew directly out of the firm’s commitment to impact investing: 20% of its assets are invested in impact strategies, and 75% of its clients include such strategies in their portfolios. When Lai joined Wetherby in 2015, the firm had approximately $130 million invested in impact assets. Today, thanks to her efforts, that number has ballooned to nearly $1.4 billion.
As chief impact officer, Lai oversees all aspects of that side of the business: integrating ESG and DEI considerations across the firm’s investment policies and procedures, reporting impact-related outcomes to clients, evaluating climate-related risks and opportunities within portfolios, and working with investment managers to help them improve their ESG, DEI, and climate-related practices. “From an impact standpoint, everything runs through me,” she says.
She is also responsible for aligning the firm’s business strategy operations with its investment philosophy. “If we believe that impact investing can add value to our clients’ portfolios, then we should believe that those same principles can add value when applied to our own business,” Lai says.
In practice, that includes advancing in-house DEI efforts, reducing the environmental impacts of Wetherby’s business operations, and leveraging the firm’s investments to further the transition to a low-carbon economy, all while striving to increase the number of impact investments that Wetherby makes. “My not-so-secret goal,” Lai says, “is to get us to 100% impact.”
Staying Power
Burns, Brannigan, and Lai say they have experienced no serious pushback within their organizations. “Nobody disagrees that we should move towards more sustainable outcomes, because they are good business: they reduce costs, create efficiencies, and throw off benefits,” Burns says.
But that doesn’t mean everyone shares their level of enthusiasm or isn’t juggling competing priorities. “It’s not as if people aren’t supportive,” Lai says. “They absolutely are. They recognize the need; they recognize the importance. It’s just that it might not be at the top of their list.”
Similarly, while having a CSO or CIO can help remind people of the importance of sustainability and impact, those reminders are not always welcome. “Because this role is all about making positive changes, I frequently have to tell people in the company that we have to do things differently if we’re going to achieve our climate commitments,” Brannigan says. And making that happen requires time, effort, and resources.
Part of the solution, Lai says, involves making sustainability and impact an explicit part of how people’s jobs are defined and evaluated. “It’s part of their performance review; it’s part of their job description,” she says. “Because it’s one of the firm’s priorities, and that needs to feed into people’s roles and responsibilities.”
Equally important, says Brannigan, is meeting people where they are and making sure that they feel heard. Rather than simply imposing sustainability targets from above, she begins by trying to understand and address her colleagues’ concerns. “Then they know, ‘Okay, this person is reasonable; this person understands that this is one of several priorities that need to be balanced,’” she says.
She is also careful to ask for their help in figuring out how to meet their shared goals, both to secure buy-in and because she genuinely needs their knowledge and skills. “We have to report quantitative progress,” she says. “But I want to do it in a way that calls on their expertise, shares ownership of the plan, and gets them on board.”
Brannigan is the first to admit that this work isn’t always easy. It takes a certain kind of personality, one that isn’t deterred by a little skepticism or the occasional roadblock. “You have to have some buoyancy, some optimism — and you have to be in it for the long haul,” she says.
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