The increase of activism by consumers for sustainable business practices has raised the importance of sustainability as a key strategy for companies. Companies can be a force for good, and the more companies that develop meaningful sustainability and environmental, social, and governance (ESG) strategies, the better for society. But how do you implement such a strategy? We spoke with Chrissa Pagitsas, author of the book Chief Sustainability Officers At Work where she interviewed 25 Chief Sustainability Officers (CSOs) and heads of ESG from a vast range of industries.
Chrissa’s book was inspired by her experience as the head of ESG at Fannie Mae and integrating sustainability principles into her company’s core product, mortgages. She recently chatted with Pia Heidenmark Cook, former CSO of IKEA and Board Member of the Sustainable Hospitality Alliance, MAX Burgers, and Origin Materials, in an online webinar about how to apply lessons learned guiding large organizations to a more sustainable future. In this interview, we asked her if she has found common themes in the way the CSOs she spoke with are implementing sustainability initiative.
My career has been built on driving new business practices that integrate positive environmental and social impact with profitability. In the early 2000s, the commercialization of solar and wind energy disrupted the business models of my clients, traditional energy companies, and I became engaged in this growing field. After a decade launching renewable energy, energy efficiency, and green building projects, I landed at Fannie Mae. There I built the first of its kind green financing business for multifamily or apartment buildings. The end result of a decade at Fannie Mae was building the world’s largest Green Bonds program from an idea to a $51 billion portfolio, developing critical tools still in use nationally today such as the US EPA ENERGY STAR® 1-100 Score and Certification for multi-family housing, and launching the enterprise’s inaugural ESG strategy.
With the book, I wanted to pull back the curtain on how to succeed at this integration by diving into the stories of 25 chief sustainability officers and heads of ESG at Fortune 500 companies and global brands.
Sustainability was officially defined by the United Nations in 1987 as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” The history of related concepts such as impact investing go back even further. Yet the rise in companies’ focus today is driven by a confluence of factors not present before: the increase of activism by consumers for sustainable business practices; increasingly limited access to key inputs to company products, such as clean water; and the recognition of environmental and social issues as key risks to companies by investors.
This “surround sound” of pressure has raised the importance of sustainability as a key strategy, not an afterthought, for companies.
It's important for companies to focus on sustainability because of the large influence they have on society, whether that’s measured through the number of people they employ, their financial impact on the economy, or the amount of raw resources they draw from the earth. The companies included in my book, from Amazon to BlackRock to Owens Corning and The Coca-Cola Company, depend on millions of people as employees and have billions in revenue and trillions in asset under management. Companies can be a force for good, and the more companies that develop meaningful sustainability strategies, the better for society.
As I interviewed the 25 executives about how one leads a credible, scalable, successful ESG strategy, I heard five concepts repeated often: priorities, patience, products, process, and partnerships. Five themes coalesced and echoed my experience building and leading a green bond business and an enterprise ESG strategy. Built out further, the pillars for success in sustainability are:
Successful sustainability leaders rely on these pillars to succeed at sustainability at their companies.
Despite working in different industries, CSOs touched on these concepts repeatedly. Let’s look at the theme, integrate with products. Virginie Helias, CSO of Procter & Gamble, and Kevin Hagen, VP of Environmental, Social, Governance at Iron Mountain work for two companies whose core products are very different, consumer product goods and data storage, respectively. Virginie had a key success integrating sustainability principles into a notable Procter & Gamble product, Head & Shoulders. Her sustainability team partnered with the Head & Shoulders brand team to produce a new bottle made from the plastic recycled from bottles gathered from French beaches. Kevin and his team, in contrast, focused on partnering with the facilities energy management team to retrofit the data centers and document storage facilities, essentially Iron Mountain’s core “product,” with LED lighting. Both executives succeeded on this integration point but in different ways.
As companies invest in sustainability and environmental, social and governance (ESG) strategies, many focus on the quick wins of buying renewable energy, starting a diversity, equity and inclusion (DEI) strategy, and building a small sustainability team. However, company leaders must recognize that harnessing the true value of sustainable business comes from employees at every level integrating sustainability principles into everyday business decisions. This type of integration takes time to implement, for sustainability to be “top of mind” for every employee. Therefore, while investing in solar panels is good, leaders must also invest in sustainability training and change management for sustainability principles to truly live within a business.
Together with Pia Heidenmark Cook, former CSO of IKEA and Board Member of the Sustainable Hospitality Alliance, MAX Burgers, and Origin Materials, Chrissa chatted about the trends in business’ integration of sustainability and how to apply lessons learned guiding large organizations to a more sustainable future in this recent webinar. You can watch the recording here.
Chrissa Pagitsas holds an MBA from the Darden School of Business, University of Virginia and a BA from Johns Hopkins University. She is the author of the book “Chief Sustainability Officers at Work” (Apress, 2022) which explores the leadership strategies of Chief Sustainability Officers at Fortune 500 companies including Coca-Cola, Cognizant, DBS, Duke Energy, IKEA, Owens Corning, Procter & Gamble. She is an independent advisor to senior executives on the intersection of environmental, social, governance (ESG) and global business.
Chrissa is responsible for market-transforming innovations including the first Green Commercial MBS in the US, a standardized energy audit for the commercial real estate market and the US EPA ENERGY STAR® 1 to 100 Score and Certification for Existing Multifamily.
Read over 20 exclusive, in-depth interviews with chief sustainability officers (CSOs) of Fortune 500 companies such as Amazon, Coca-Cola, and Procter & Gamble and globally recognized brands such as IKEA and Netflix. These CSOs reveal how they deliver positive environmental and social impact through their companies’ core products and services and generate revenue growth while tackling unique leadership, change management, regulatory and stakeholder challenges.