Green guru or strategic savant: Singapore companies make tough choices in CSO hires

Only half of largest listed companies’ green generals came from previous sustainability roles, with many preferring operations and strategy experience

By JANICE LIM and WONG PEI TING

The Business Times, 3 April 2023

 

SINGAPORE’S largest listed companies appear split on the most important requirements for a chief sustainability officer (CSO), with only half of their appointees holding green-related jobs when they were hired, according to an analysis by The Business Times.

In the absence of sustainability-related expertise, companies are hiring candidates with strong operational or strategic backgrounds – reflecting the challenges of finding ideal candidates for a multi-faceted role.

As at Mar 22, 26 of the 50 largest primary-listed companies by market capitalisation on the Singapore Exchange had the equivalent of a CSO. Two of those companies had two sustainability leads each, resulting in 28 CSOs.

BT looked at the roles each of those CSOs were holding just before their current appointment, and found that only 13 of the 28 had prior experience in leading sustainability-related functions. A close second in prior experience – held by 11 of the 28 hires – was operations or strategy. Despite the popularity of those skills, only four individuals were running both sustainability and operations or strategy functions before becoming CSO.

Tough choices

Those two most popular sets of prior experience reflect the qualities of an ideal CSO. Greg Brittian, head of sustainable business for Asia-Pacific at Acre, a sustainability recruitment firm, said CSOs should possess both relevant sustainability qualifications – even if they do not have a technical sustainability background – as well as exhibit strong leadership and strategic skills.

Unfortunately, given the relative nascency of this function in Singapore, most companies have to give up on hiring the “double threat” and instead just pick one of the two skills. Which one they pick puts them on opposing sides of a vigorous debate in the industry.

Darian McBain, founder of sustainability advisory Outsourced Chief Sustainability Officer Asia, said that a candidate with an operations or strategy background may be able to execute the plans, but deep experience in sustainability is needed to grasp the breadth of issues a company may face and to appreciate the complexities of potential solutions.

“If you are appointing someone as a chief, you would expect that depth of experience. Just as you wouldn’t have your chief legal officer without a law degree, you wouldn’t have your chief financial officer without an accounting degree. Why would you have a CSO without relevant sustainability training?” said McBain, formerly the CSO of the Monetary Authority of Singapore.

But Shai Ganu, who chairs the ESG committee at the Singapore Institute of Directors, said that the best CSO are business leaders themselves. “You are a business leader first, and then you become a CSO,” he said.

On Ganu’s side is Esther An, CSO at property group City Developments Ltd (CDL). An led corporate social responsibility at CDL before being named CSO in 2014. She argued that a CSO does not have to be an environmental engineer, in the same way that a chief executive officer (CEO) does not have to be a lawyer or a technical project manager.

Turning to address the notion that someone with a master’s degree in an environmental field might be a better fit, she said: “It is not just about the academic certifications. Having one doesn’t make you an expert...

“You need to know the numbers. You need to know communications. You have to be good with articulation, words. And you must be a strategist. It is like a CEO.”

She concurred, though, that appointing a CSO without sustainability experience could constitute an act of “sustainability washing”. People had reacted to such appointments by saying, ‘This guy had never done one (sustainability) report. Now he is CSO of this one big company?’, she added.

Hunting grounds

One way to close the skills gap could be to look outside of Singapore. Markets such as Europe or Australia started focusing on sustainability years before the city-state did, and pickings there could be better.

But listed companies in Singapore worry that such imports may not have a good grasp of cultural norms and issues in Asia, said Gabriel Nam, partner at recruitment consultancy Page Executive.

Companies also tend to prefer CSOs who are familiar with the priorities and operations of their business, which explains why internal hires outnumber external ones two to one, according to BT’s analysis.

However, Brittian said unprincipled internal and local hiring criteria risk being perceived as a “weak response to a critical business issue”. Appointees may struggle to establish credibility with internal and external stakeholders if their targets or strategies are not ambitious or put into action.

Companies are therefore advised to look outside their industries, such as in consumer products given that this sector might be more exposed to reputational risks, or to find candidates that have related skill sets even if those skill sets do not meet all the requirements, Nam said.

Some appointments reflect the evolutions of the companies’ sustainability journeys. CSOs that started as in-house legal counsel – three of the 28 CSOs – could reflect an initial focus on reporting and compliance at their companies, Ganu said.

McBain said businesses should not compromise on quality: “I don’t think any company can afford to say, ‘We can’t find the right person. So we’ll just put anyone in place.’ We really do need to have a lot more focus on having the right people.”

Making it work

Given the shortage of candidates with the desired skill sets, companies should put their appointees in the right conditions to succeed, said Corrado Forcellati, director of sustainability consulting Paia Consulting.

CSOs who do not come from a sustainability background should not be double or triple-hatting to give them the time and resources to develop specialisation, he said. “You don’t need to be technically savvy, but you need to have an understanding about how we actually practise the language of sustainability by being confidently able to engage.”

To help their CSOs, many companies hire mid-level sustainability specialists to help their CSOs with technical work, observers said. McBain suggested outsourcing work to a “part-time” CSO, or assembling advisory panels of professionals.

“Companies in Singapore need to think, ‘Am I better having a portion of the time of a very experienced CSO than the full time of someone who is inexperienced?’

“So I think that fractionalisation of services when you are in an industry where there is a shortage of talent, really looking at models where you can share that talent and experience may be the way to go,” said McBain.

Ganu pointed out, however, that the part-time model might run into commercially sensitive matters.

CSOs – especially but not only those without a sustainability background – also have to continually learn and upskill, Forcellati said.

Golden Energy and Resources’ head of market intelligence, innovation and sustainability, Tan Toi Ngee, remarked that the field is evolving so rapidly that practitioners have “no choice” but to go for courses while working the job concurrently.

Sustainability has become such an all-encompassing subject that there is “no longer one clear ‘easiest’ path to understanding all the facets”, Tan added.

Unlike well-established functions like finance or human resources, the sustainability playbook is still being written.

“Nobody has all the answers,” Ganu said.