Bank i ng & F i nanc i a l Se r v i ce s 56 Finance Monthly. The rise of the CSO As part of our mission to help financial institutions and fintechs adapt to today’s requirements, we at TISAtech partnered with our ESG ratings partner The Disruption House to survey decision-makers across UK financial institutions and found that 76% of them were looking to make a permanent inhouse hire to lead their ESG activity. For many, this will mean the appointment of what is becoming a mainstay in financial C-suites across the world- the Chief Sustainability Officer, or CSO. According to Deloitte, the CSO’s role is threefold - they help organisations make sense of the wider environment, they determine how their business strategy can align with societal and regulatory trends, and they communicate and implement these changes throughout the firm. The CSO is needed when the external environment is changing faster than the internal, minimising future risk and disruption, and ensuring a future ‘licence to operate’. Formanyfirms, theseconsiderations are still within the CEO’s remit. Therefore, the appointment of a CSO is more than a publicity stunt. When empowered, the addition of a specialist for whom ESG is their sole focus ensures these initiatives are prioritised- even with the best intentions, the CEO only has so much capacity. A particular set of skills As the importance of ESG has risen, so too has the calibre of candidates and the competition for their services. The Financial Times notes that whilst deep climate expertise used to be the main criteria for the role, modern CSOs are now also expected to possess elite strategic business thinking and technical skills. They now must be able to handle the legal, strategic, and operational implications of their recommendations, whilst retaining the credibility and expertise of one genuinely passionate about sustainability. This specific expertise sets them apart from the rest of the C-suite and is crucial if they are to effectively ‘make sense’ of the landscape, sell a vision, and drive meaningful cultural change. The growing responsibility of the role is evidenced by research from PwC, with 2020-21 seeing the appointment of more CSOs than in the previous 8 years combined. This combination of core C-suite skills and genuine sustainability credentials is rare. As a new, fast-growing discipline, there is a wider ESG talent shortage, and “The Financial Times notes that whilst deep climate expertise used to be the main criteria for the role, modern CSOs are now also expected to possess elite strategic business thinking and technical skills.”
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