Climate change and environmental challenges, like resource depletion, are more pressing than ever. However, some organizational investments seem to be in conflict, such as enhancing financial performance in the short term and establishing sustainable supply chains for the long term. Today, both business resilience and sustainability are key to a company’s success.
Leaders can balance these demands by undergoing holistic sustainability transformations, but who runs point varies. Organizations and regions differ on where responsibility for sustainability resides within the executive board, based on our empirical analysis across DAX40, STOXX Nordics 30, and FTSE 30 companies.
Who leads sustainability?
Among Germany's DAX40 companies, 40 percent assign sustainability directly to the CEO. In Scandinavia, 27 percent of STOXX Nordics 30 companies combine sustainability with communications, external affairs, or stakeholder management board positions. Seventeen percent of FTSE 30 companies in the UK place sustainability responsibilities with their operational or strategy leaders, such as the COO or CFO.
However, the chief sustainability officer (CSO) is becoming more common. In Scandinavia and the UK, around 10 percent of the biggest public companies have a CSO at the executive board level. The CSO focuses exclusively on sustainability to raise internal awareness and build knowledge of environmental, social, and governance (ESG) topics; coordinate and facilitate efforts across the organization; and act as the point of contact for stakeholder communication and management.
Another interesting development is the creation of a new boardroom title: the chief people and sustainability officer (CPSO). The CPSO role merges sustainability objectives with people strategies, propelling operational adoption of sustainability while promoting employee well-being, values-aligned corporate culture, and diversity.
Allocating sustainability to specific board roles offers different advantages. When sustainability falls under the purview of the CEO, it signals high-level prioritization both internally and externally. When the COO oversees it, operational aspects like responsible supply chains and process redesign are more likely to take precedence. Assigning it to the CFO integrates sustainability into business planning and ensures that progress is measured, tracked, and supported by a clear business case with a concrete return on investment. A dedicated CSO provides technical expertise and builds legitimacy and reputation, while the CPSO role yields synergies between sustainability and people.
How is sustainability ownership determined?
Although the range of ownership approaches may seem unusual, implementing social and environmental sustainability requires gradual, strategic change along an extended transformation journey. The ideal leadership model depends on specific company characteristics, in alignment with three stages through which organizations typically transition.
Importantly, the below archetypes are not mutually exclusive; this is not to suggest that a company that assigns sustainability to the CEO will start strong but not drive lasting change, or one that assigns it to the COO will not start strong.
- Starting strong
In this stage, a company signals change to internal and external stakeholders with a clear vision and decisive commitment to sustainability from the CEO—for instance, setting an ambitious net-zero target for the organization, approved by the Science-Based Targets initiative. A detailed target state, a fixed point in time until the target should be reached, and a roadmap showing how the organization intends to get there are crucial to build momentum and communicate objectives to business partners, shareholders, and the wider market. - Generating momentum
The focus shifts from vision to concrete, validated business cases and tangible actions that drive transformational change in this stage. Depending on who leads out on sustainability, this could look like redesigning processes and practices enabled by a CSO’s dedicated expertise, or creating a thriving environment based on talent acquisition, development, and organizational culture under a CPSO. For example, under the leadership of a CHRO, one organization redesigned its internal talent structure to drive sustainability forward. - Driving lasting change
In this stage, sustainability can be owned by the core operational leader of the business—e.g., the COO—or more industry-specific roles, such as chief purchasing officer in retail or chief technology officer in tech. For example, sustainability lies with several C-level executives at one energy provider. Sustainability metrics for strategic areas are integrated into key business decision gates, including semi-annual portfolio reviews and investment decisions, to hold the leadership team accountable.
Making any one executive board member responsible for sustainability will not suddenly yield results. Rather, as a company progresses along its sustainability journey, the ideal executive board positions to lead these efforts may change and broaden depending on stage, industry, business model, and needs.
What remains consistent across all stages is that sustainability is not a one-off effort but a constant process that demands different strategies and approaches depending on where a company stands. Strong, decisive leadership to engage the entire company in the transformational process and to demonstrate a solid commitment to a sustainable, resilient future is the key to success.