Throughout my career I have seen sustainability roles in corporates be shoved, bolted on or thrown in as an afterthought into HR, Marketing, Legal, Strategy, Environment, Safety, Office of CEO and the list goes on. In fact, looking back especially in my role as Head of Sustainability in large multinationals I have reported most of those teams at one stage.
I was looking at the Sustainability and Leadership Conference coming up here in Auckland and a saw from the speaker list a growing trend which is the combination of Sustainability and Corporate Affairs. It is this mix that raises significant concerns, and based on my personal experience, it is an extremely problematic blend. Having worked for two large multinational companies over a span of 20 years, with four of those years directly under the supervision of Corporate Affairs, I can confidently say that those were the most difficult and challenging years of my career.
Whenever I presented a complex sustainability issue, I could visibly see the conflicting emotions on my managers' faces. Sustainability was a relatively new concept to them, and finding a balance between corporate reputation and sustainability seemed almost impossible. Unfortunately, in 90% of cases when faced with a choice between reputation and sustainability, reputation took precedence. Allow me to outline the six key reasons why combining these two functions is ill-advised, akin to mixing oil and water together. Dangerous and hard to clean up.
Reason 1. Focus and Expertise: Sustainability and corporate affairs are distinct disciplines that require specific expertise and focus. Sustainability professionals should be responsible for developing and implementing strategies to minimise environmental impact, promote social responsibility, and ensure long-term viability. Corporate affairs professionals, on the other hand, are focused on managing communication, reputation, and stakeholder relations. Combining these roles in my opinion dilutes the depth of knowledge and effectiveness in each area.
Reason 2. Different Objectives: Sustainability and corporate affairs have different objectives within an organisation. Sustainability aims to drive positive environmental and social impact while ensuring long-term business sustainability. Corporate affairs, on the other hand, focuses on managing reputation, stakeholder relationships, and public perception of the company. These objectives require different skill sets and approaches, which in my experience they don’t align at all.
Reason 3. Stakeholder Engagement: Both sustainability and corporate affairs involve stakeholder engagement, but the nature of engagement differs. Sustainability professionals engage with stakeholders to understand and address environmental and social concerns, gather feedback, and collaborate on sustainable solutions. Corporate affairs professionals focus on managing relationships, addressing public relations issues, and maintaining positive stakeholder perceptions. Separating these roles allows for specialised strategies and tailored approaches to stakeholder engagement.
Reason 4. Risk Management: Sustainability and corporate affairs deal with different types of risks. Sustainability professionals assess and mitigate environmental and social risks, such as climate change impacts, resource scarcity, and social inequality. Corporate affairs professionals handle reputational risks, regulatory compliance, and crisis management. By keeping these roles separate, organisations can address risks more effectively with dedicated expertise. You need both opinions in the room and have good robust tension between the two.
Reason 5. Transparency and Credibility: Keeping sustainability and corporate affairs roles separate enhances transparency and credibility. Clear separation ensures that sustainability initiatives and reporting are conducted independently, fostering trust among stakeholders and avoiding conflicts of interest. It demonstrates the organisation's commitment to robust sustainability practices rather than merely managing its reputation.
Reason 6. Accountability and Measurement: Distinct roles enable clear accountability and measurement of outcomes. Separating sustainability and corporate affairs allows for the establishment of measurable targets, tracking progress, and reporting on sustainability performance without potential biases or conflicts of interest. This promotes accurate reporting and enables meaningful comparisons against industry standards and benchmarks.
In conclusion, the integration of sustainability roles within corporate affairs departments has led to the dilution of effectiveness in driving much needed meaningful change. Throughout my career, I have witnessed the challenges and conflicts that arise when sustainability is combined with corporate affairs. The distinct disciplines of sustainability and corporate affairs require specialised expertise and focus. By separating these roles, organisations can harness the full potential of sustainability strategies while maintaining the integrity of their corporate reputation. Transparency, credibility, stakeholder engagement, risk management, and accountability are better served when sustainability and corporate affairs operate independently and have healthy tension between the two.
To truly make a lasting impact, it is crucial to recognise the unique value and significance of dedicated sustainability leadership. By preserving the separation between sustainability and corporate affairs, organisations have a much better chance of success.