April 15, 2024
Willibald Kofler © Strategy& Österreich

| Tobias Seifried

| 07/13/2023

Leading Austrian companies are taking ESG factors more and more seriously and are hiring a Chief Sustainability Officer in their team. However, CSOs usually don’t have much to say (yet). Experts therefore speak of a “light” version.

According to a current analysis, ATX companies are placing more and more importance on sustainability and are now bundling this issue with a Chief Sustainability Officer (CSO). However, the influence of the CSO varies considerably within the 20 companies listed on the Prime Market of the Vienna Stock Exchange. These are the conclusions of the study “An organization setup fit for ESG transformation – the need for a Chief Sustainability Officer with impact” by Strategy&.

It really started three years ago

According to the analysis, approximately three-quarters (75%) of current ATX CSOs have been hired or promoted to the role in the past three years. According to this, all 20 ATX companies (100%) are currently in the CSO role. This demonstrates both companies’ commitment to accelerating ESG transformation and the resilience of the role of CSOs in a challenging economic environment, PwC’s global strategy consultancy said. So far, however, only 35 percent of Austrian ATX CSOs are at board level and thus also have the corresponding decision-making power to be able to comprehensively drive the ESG transformation forward.

“ESG transformation has now arrived in the economy: all 20 ATX companies have already created a CSO position where the various aspects of sustainability come together,” says Willibald Kofler, Country Head of Strategy & Austria. However, creating such a position is only the first step. Equally important is the integration of the CSO into the core business. Kofler: “Civil society organizations should be involved in strategic decisions and provided with sufficient resources. This is the only way they can lead and implement the necessary change within their organization.”

Mostly little decision-making power

Overall, according to the study, the field of ATX CSOs is divided into two groups of unequal size: CSOs with ties to top management, who have the necessary weight to independently anchor ESG objectives in corporate strategy and to adapt internal processes and models of business (“CSO with impact”) and CSOs who do not have this access to the top management level and who have only a limited mandate (“CSO light”). According to Strategy&, nearly two-thirds (65%) of ATX companies currently have “CSO lights” – they don’t necessarily report directly to the board – and therefore have little influence to actually be able to implement transformative changes.

“Many companies seem to have already recognized the growing importance of ESG factors for their long-term financial future and value creation. However, more needs to be done to further develop the role of CSOs and its internal relevance,” explains Harald Dutzler , Partner of Strategy& Austria. This is particularly true for most ATX companies, which employ a “light CSO” and therefore have only limited influence on the company’s ESG transformation. There therefore seems to be a great need to specifically strengthen the mandate of the CSO in Austria in order to be able to carry out a holistic sustainability transformation, according to Dutzler.

For civil society organisations, experience is what counts

The analysis also examined the demographics of ATX CSOs. This shows that when filling the position of CSO, companies place particular importance on years of service at the company, a corresponding in-depth knowledge of the company structures and a resilient internal network. 70% of ATX CSOs were promoted to their positions internally. More than half (55%) have an economic background. There is still a clear imbalance in the gender distribution: only 30 percent of ATX CSOs are female, of which only 14 percent are “CSOs with impact”.

Kofler concludes from the study findings that the role of the CSO has continuously developed in recent years and has rapidly gained in importance. In order to be able to carry out the necessary adjustments to the business model and processes, the role must be individually tailored to each organisation. “It is essential that the position of CSO adapts to the specific ESG challenges of the company and takes into account the organizational structures and culture of the company”, concludes the Strategy& expert.

www.strategyand.pwc.com

#ATX #companies #sustainability #manager

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