Arndt Heinrich, Denis Huebner, Jannik Trapp, Maximilian Rauh

It’s common nowadays for companies to have a chief sustainability officer and team in place. This bundles the responsibility and often capabilities for sustainability-related topics in one place.

But while establishing clearly defined responsibilities is key to kickstarting the road to sustainability, one function alone cannot drive every sustainability-related decision that needs to be taken, day in, day out, or manage all of the trade-offs required against performance and costs, particularly when sustainability targets are not incentivized elsewhere in the organization.

In principle, there are two solutions here: either every decision-maker in the organization has a degree of ownership over its sustainability KPIs, or some form of internal “carbon pricing” mechanism is used to manage the balance among sustainability, cost, and profitability goals. The right solution, and the extent to which it is implemented, will depend largely on your own organizational setup and influences, and how decision rights are structured. In both cases, the focus should shift from being purely profitability driven to a holistic responsibility for all of the firm’s goals, sustainability included.