Since 2010, when I wrote a book entitled Sustainability Management and led the start-up of Columbia’s Master of Sustainability Management program, I’ve seen sustainability as a fundamental management principle. I’ve taught both management and environmental policy since the early 1980s and have led an MPA program in environmental science and policy since 2002, but it took me about 25 years until I saw environmental protection merging with organizational management and emerging as a management principle. Like human resources, finance, accounting, marketing, performance measurement, strategic planning, and operations management, I saw a concern for an organization’s use of resources and its impact on its surrounding community as central to an organization’s cost structure and business model. Initially, energy efficiency seemed the low-hanging fruit worth pursuing. Later, water and waste management seemed places where organizations could reduce costs and improve environmental quality. By 2010, I saw that customers and staff were attracted to organizations that paid attention to their environmental impact. Companies were making money in an emerging green economy due to their market appeal and mission orientation.
As a student of Total Quality Management, the idea of driving waste out of operations and focusing analytic attention on suppliers and customers seemed a logical prequel to a concern for wasted resources and environmental impact. The technology of renewable energy and battery storage seemed to be a clear way of reducing energy costs and environmental impact. The field of industrial ecology was being developed to turn production waste into resources for production. Finally, as the climate models of the early 20th century proved correct in predicting sea level rise and extreme weather, investors started to express concerns for the financial impact of environmental risk, and the field of sustainability management evolved from greenwashing public relations to an integrated part of high-quality organizational management. Investors began demanding data on environmental risk and greenhouse gas emissions. Companies started producing annual sustainability reports or adding these factors to their annual reports to shareholders.
A recent piece in the Wall Street Journal discussed this evolution by highlighting the changing role of Chief Sustainability Officers. WSJ’s Yusuf Khan begins the piece by relating the professional journey of Sophia Mendelsohn, one of the early graduates of Columbia’s Master of Sustainability Management program. According to Khan:
“When Sophia Mendelsohn started her career in sustainability 20 years ago, her co-workers would leave empty cans of cola on her desk to recycle and part of her job was to persuade people to print on both sides of a piece of paper. Now, Mendelsohn is the chief sustainability officer of software giant SAP and reports directly to its chief executive, Christian Klein, working on the company’s long-term strategy for climate and sustainability. Once perceived as hippies and tree-huggers, chief sustainability officers have seen their role evolve from a backroom marketing function to being key figures in a company’s business operation and growth. Demand from consumers for companies to be more upfront on their climate goals, increased regulation around sustainability and shareholder activism have added momentum to these changes.”
For a number of years, Mendelsohn was in charge of sustainability at Jet Blue and has been a pathbreaker in establishing the profession of sustainability management. Over the past decade or so, many of our graduates have taken on sustainability leadership roles, and I’ve seen the definition of sustainability management expand to include organizational governance, staff diversity, and community impact. While my personal interest remains focused on environmental sustainability, what was originally the entire field of sustainability management is now the central subfield of a management practice that has broadened to include these other important factors.
The number of private companies with Chief Sustainability Officers is growing as sustainability management is becoming a more important and fully integrated part of corporate management. Again, according to Yusuf Khan’s recent report:
“Roughly 183 public companies in the U.S. now employ a CSO, up from 29 in 2011, according to a recent report from recruiter Weinreb Group. Of those, more than three-quarters sit on the company’s leadership team while just over a third report directly to the CEO. In Europe, CSOs are becoming even more common. In Germany, for example, 90% of companies had a dedicated CSO role in 2022, according to PricewaterhouseCoopers, with 58% of those listed on the DAX exchange having women sustainability chiefs.”
The growth of sustainability management is not limited to the private sector. Under an Executive Order issued by President Biden, the Office of the Federal Chief Sustainability Officer was created within the White House Council on Environmental Quality. According to the federal sustainability website:
“President Biden has charged the U.S. Federal Government to lead by example by sustainably managing its footprint of over 300,000 buildings, over 600,000 vehicles, and $650 billion spent annually on goods and services. He issued Executive Order 14008 during his first week of office, calling on the Federal Government to align its management of property and procurement to support robust climate action while creating new jobs and catalyzing the country’s clean energy industries. On Dec. 8, 2021, President Biden signed Executive Order 14057 and issued his Federal Sustainability Plan, which directs the Federal Government to achieve net zero emissions by 2050 by transitioning Federal infrastructure to zero-emission vehicles and energy efficient buildings, powered by carbon pollution-free electricity. The Office of Federal Chief Sustainability Officer, which is a part of the White House Council on Environmental Quality, is leading the implementation of Executive Order 14057 and issued his Federal Sustainability Plan.”
The Biden Administration has required each federal agency to appoint a chief sustainability officer with the goal of ensuring that agency purchasing and operations reduce their greenhouse gas emissions and other environmental impacts. Over 50 agencies have appointed CSOs. Given the slow pace of management innovation in the federal government, I’m not surprised that only a small amount of progress has been made, as indicated by a federal scorecard published by the Federal Chief Sustainability Office. This report provides data on progress to date. For example, in FY 2021, 2% of federal vehicle purchases were zero-emission, and by FY 2022, that had grown to 12%. That means 88% of the vehicles purchased by the federal government were powered by internal combustion engines. Pathetic, but less pathetic than the year before at 98%. Still, a journey of a thousand miles begins with a single step.
Nonprofit organizations like universities and hospitals are also appointing chief sustainability officers, and like the government, they too have a mixed record of success. Overall, we are seeing more rapid adoption of sustainability management in the private sector. This tends to be the path of management innovation generally: It often begins in the private sector, stimulated by efficiency and the demands of investors, and disciplined by competitive processes that sort symbols from reality.
But by any measure, the vision of integrating environmental concerns with routine management is beginning to become a reality. The symbolic era of greenwashing is giving way to a widespread understanding that environmental sustainability is not a fringe concern but a more central element of management. On a more crowded and economically developed planet, our human population is making demands on our ecosystems and resources. Those facts of economic life are changing cost structures and making renewable resources more cost-effective. Technology like artificial intelligence and robotics are making resource reuse more practical.
The most visible challenge to this new stream of management innovation is scientifically illiterate politicians who consider climate change a “belief” rather than a scientific fact and fossil fuel executives who believe they can protect their dying industry with political clout and campaign cash. The transition away from fossil fuels will take decades, but it is well underway and unstoppable. It is not driven by climate politics or progressive ideology but by technological change and market forces. Sustainability management is simply a more sophisticated form of management built to accommodate the environmental, social, economic, and technological conditions of the modern economy. Just as accounting was added in the 1930s and performance measurement was added to management routine at the end of the 20th century, sustainability management is being added today. It is a response to a more complex competitive environment, and it is correlated with financial success. In the past two decades, we have begun to move from sustainability mirage to the operational practice of sustainability management.
Views and opinions expressed here are those of the authors, and do not necessarily reflect the official position of the Columbia Climate School, Earth Institute or Columbia University.
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- Source: https://news.climate.columbia.edu/2024/05/28/from-sustainability-mirage-to-sustainability-management/