There is a definition of the chief sustainability officer (CSO) as the ‘paramilitary wing of the marketing department.’ This translates as plenty of glossy reports and smiling faces, but also plenty of scepticism from the consumer about the true effect the business is having.
With various regulation coming down the pipe however, things are starting to change. The CSO, and associated titles, now sit at the heart of the legal, strategy and finance functions. It is ‘professionalising and institutionalising’, according to Anna Krotova, head of sustainability at food retailer Picnic Technologies. Sustainability leaders now have to ‘basically build a new corporate function’, as she puts it.
If this sounds like a bit of a headache, then help is at hand. Last month Krotova, alongside co-author Jennifer Geary, published How to be a Chief Sustainability Officer: Leading the Transition to a Sustainable Organisation. The book is aimed at executives on both ends of the spectrum; those who have the sustainability credentials but lack the corporate experience, and seasoned executives who miss the sustainability context.
Krotova notes the expected impact of the CSRD (Corporate Sustainability Reporting Directive) – around 40,000 companies within the EU either hiring external expertise or promoting from within – was the trigger to put words on the page.
“I wanted to give both of these worlds a toolkit or guide for how you execute in this role, who your key relationships are in an organisation, how you work with these people, what conflicts, what synergies exists, what sustainability culture is and how you build strategy,” Krotova tells Sustainability News. “Then also technical areas; how do you do an impact assessment? What kind of impacts can your organisation have? What is the materiality assessment? How do you do that? How do you build investor relations? How do you manage sustainability risks?
“And then you wrap it all up and bring it all together [by saying] ‘okay, so with all of this, you’re still not done’”, she adds. “You still need to build a team, form a budget, understand the technology market and what technology can do for you. So [it’s about] giving this really comprehensive overview of both the necessary synthesis of sustainability theory, but together with really practical tips and advice on how to execute in this role.”
The experiences comprising Krotova’s career have helped her examine the issue from both sides; what she calls a ‘multi-stakeholder and multi-disciplinary perspective’ to sustainability. Having spent almost half a decade at the GRI (Global Reporting Initiative) leading standards development, she wanted to put the best practice she had developed into action, first at SaaS banking platform Mambu – where she first met Geary at an online event – and Picnic.
Picnic offers a new business model in food retail, replacing in-person shopping at the store with an app-only approach and an electric last mile delivery of groceries to the customer’s doorstep. From humble beginnings in the Netherlands in 2015, Picnic now has a strong footprint in Germany and France. The company is built entirely from the ground up, from its fully automated warehouse to its delivery algorithms.
A focus on sustainability is baked in by design – and Krotova notes other business advantages which arise from this. “Since all the grocery shopping is done through an app, we have a pretty good handle on data and on managing food waste, because we can better forecast how much customers buy and avoid overstocking,” she says.
Krotova notes that the wider value chain and scope 3 emissions are opportunities to develop and improve. One such example was through an assessment of Picnic’s carbon footprint, shortly after Krotova joined, which found that the emissions of the food Picnic sells (scope 3) by far trump emissions from all other activities.
This is something of a delicate area. As Sustainability News has previously covered, companies are beginning to accept responsibility for promoting more sustainable lifestyles – including diet. Krotova describes it as ‘tricky’ but says it is something Picnic is exploring.
“People’s eating habits and preferences are strongly connected to culture, lifestyles, financial means and general health and environmental awareness. It’s a big area to address. You are, in the end, a retailer, operating within a broader system of regulation, incentives, competitors, and consumer expectations,” she says. “But you do have the opportunity to give more space to different types of products and promote different types of diets.
“So we’re looking into that component – how can we modify our assortment that is more in line with planetary health and human health? And then how can we leverage our technology to actually match customers towards these different diets?”
No such initiative exists in a vacuum, however. Regulation helps – Krotova says the ‘direction of travel is there’ – as well as a growing consumer awareness of the issues in the food industry and desire to buy more sustainable products. Yet one aspect of consumer attitude is changing.
“The trend I’ve seen this year is [that] the willingness to pay a premium has reduced compared to previous years,” says Krotova. “So yes, [consumers] want green and sustainable, but we’re not going to pay more for it.”
It is these shifting sands and conflicts therefore which help define the CSO-type role. Krotova says that aspiring heads of sustainability must be ‘very pragmatic and very focused.’ “There’s quite a lot of things and demands on CSOs at the moment, and if you come to this area without prior background in sustainability, everything might seem important, and that’s not the case,” she says.
“Always remember that, yes, you are working towards a better and good goal, but there will be setbacks, and be prepared to deal with them. In those moments, step away, perhaps take a break, go and focus on a different objective, and then come back and pick up that work.”
Anna Krotova is speaking at Sustainability Expo Europe, taking place on 1-2 October in Amsterdam. Find out more about How to be a Chief Sustainability Officer: Leading the Transition to a Sustainable Organisation, as well as other CSO resources, on her personal website.
