Morgane Benoist | Sustainability Consultant
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A company’s board of directors and executive team typically includes indispensable “chiefs”: CEOs (chief executive officers), COOs (chief operating officers), CFOs (chief financial officers)… But in recent years, a new kind of CxO has emerged in boardrooms around the world: the CSO, or Chief Sustainability Officer. What is their mission? Are they essential to a company’s sustainability success? This article explores the evolving role of CSOs, their growing strategic importance, and whether companies should consider appointing one.
The Rise and Evolution of the Chief Sustainability Officer
The role of CSO traces its roots to corporate social responsibility (CSR), which was historically more about reputation than revenue. CSR initiatives were often led by then-CSOs as part of a company’s communications or marketing efforts, showcasing how the company could “give back” to society. However, this is rapidly changing.
Today, sustainability is a strategic imperative. The CSO is increasingly seen as a key figure in ensuring long-term corporate resilience, managing reputational risk, navigating regulatory shifts, and aligning with stakeholder expectations. While the responsibilities of a CFO or COO are well-defined and relatively consistent across industries, the CSO role remains fluid and heavily dependent on the company’s sector, market presence, and maturity in sustainability.
The growing weight of ESG regulations is pushing companies to place sustainability leadership at the center of their decision-making. Frameworks such as CDP and ACT now explicitly evaluate sustainability expertise at the leadership level. For instance, CDP asks in question 4.2 “Does your organization’s board have competency on environmental issues?”. Evidence can be given through proof of regular consultations with internal experts or having an executive with environmental expertise, which is where the CSO comes into play.
ACT goes even further, requiring companies to demonstrate that their board or executive leadership understands the science and economics of climate change in the Climate Change Oversight Capability indicator. To prove so, the company must show that the person overseeing the company’s sustainability committee has relevant training or professional experience. ACT states that “even if companies are managing climate change at the Board level or equivalent level, a lack of expertise could be a barrier to successful management of low-carbon transition.”, reinforcing the necessity of a dedicated sustainability person on company boards.
CSOs still Underutilized in Japan and Globally
In Japan, the adoption of CSOs is slowly gaining traction. A 2022 survey of 510 listed and unlisted Japanese companies showed that only 25% had appointed a CSO. Among Prime-listed companies, nearly half (48.5%) had not appointed one, while 81% of non-listed companies had no CSO at all. Globally, the situation isn’t much better. In 2023, more than half of the Fortune Global 500 companies still lacked a designated CSO. Interestingly, companies without a CSO saw a 3% increase in GHG emissions, while those with one performed better, suggesting a clear link between sustainability governance and environmental outcomes.
Even among Japan’s top 10 companies by revenue, only six have a CSO or equivalent. But even then, these roles are frequently assigned to executive officers (執行役員) rather than board directors (取締役) and are often combined with other roles: For example, Hitachi’s CSO also serves as the Chief Human Resources Officer and Chief Diversity & Inclusion Officer, potentially diluting focus from climate strategy. Internationally, more firms are recognizing the strategic importance of the CSO, but few grant them a seat on the board. Notable exceptions include Mercedes-Benz, CVS Health, and UnitedHealth Group.
Without direct board-level access, sustainability initiatives risk being sidelined or underfunded, especially in times of economic uncertainty.
One reason many companies haven’t appointed a CSO is the lack of internal sustainability capacity. A 2024 Climate Change Coaches survey found that 72% of companies have five or fewer employees formally assigned to green transition responsibilities. On the other hand, the demands keep increasing: sustainability roles are evolving from basic reporting and compliance to encompass core business strategy, risk management, and stakeholder engagement. As a result, companies need employees with even more diverse and specialized skillsets.
This talent is scarce. In 2023, Japan saw more than seven job offers per GX-skilled candidate, indicating a severe labor shortage in this critical area.
Appointing a CSO is Not the First Step
If the question is, “Does your company need a Chief Sustainability Officer?”, the answer would be “yes, but”. Appointing a CSO is just one step in a much broader green transition. A CSO is only as effective as the authority, mandate, and resources they’re given. Without decision-making power, budget control, or a dedicated team to support them, a CSO risks a greenwashing symbol rather than a driver of change. For a CSO to deliver real value, they must be integrated into the company’s core strategy, empowered to influence operations, and backed by a skilled sustainability team that can translate vision into action. For SMEs, the challenge starts with talent acquisition.
Conclusion
Not every company needs a CSO right now, especially small businesses or companies still laying the groundwork for sustainability. But companies that are serious about ESG, long-term resilience, and competitiveness cannot ignore the strategic importance of the CSO role. Sustainability is no longer a communications or compliance issue. It is a C-level issue. And that’s exactly where a CSO belongs.
In the future, sustainability may be so embedded into corporate culture that every executive understands environmental risks and integrates them into their decisions, and this is when the CSO role will become obsolete. But until that day comes, companies need a dedicated sustainability voice in the boardroom, not just for the planet, but for their own survival.