Collaborating with an organization’s leadership team, fractional chief sustainability officers (CSOs) embed environmental, social, and governance (ESG) practices across operations, such as supply chains and product development, to ensure sustainability initiatives go beyond a compliance focus to become a core part of the organization’s business model and value creation.
How Do Fractional CSOs Help Companies?
Fractional CSOs provide an objective perspective to help a company understand its most important sustainability-related risks and opportunities, and work with management to identify internal resources who can address those considerations by integrating them into their day-to-day responsibilities.
This includes the creation of sustainable impact goals based on the company’s current needs, industry benchmarks, and stakeholder expectations, as well as key performance indicators to help the company measure and optimize the impact of its sustainability initiatives.
Even organizations with dedicated sustainability team members can benefit from specialized expertise, project leadership, and benchmarking insights from a fractional CSO.
Improving Operational Efficiency
A fractional CSO can enhance operational efficiency by streamlining the sustainability function within organization. This can include direct efforts like generating cost savings through initiatives that reduce energy consumption or waste generation in operations, or streamlining processes to identify bottlenecks, improve production timelines, and reduce errors.
Similarly, fractional CSOs can enhance supply chains by engaging with partners to foster sustainable practices, share goals, and encourage the adoption of more efficient processes.
For example, they can establish metrics related to carbon emissions, water usage, and waste generation, and implement systems that increase efficiency and reduce miles traveled. In another example, improving warehouse and inventory management can reduce costs and waste by providing insights into product shelf life and rotation.
Risk Management and Reporting
Fractional CSOs assess sustainability risks that could affect the organization, such as regulatory non-compliance or reputational damage. For instance, they can help management identify and mitigate exposures such as dependence on non-renewable resources or the potential for climate-related disruptions to operations or suppliers.
They can also ensure the organization adheres to evolving regulations by monitoring compliance with sustainability laws and anticipating likely regulatory developments.
With sustainability disclosure mandates increasing, a fractional CSO can work with company leaders to help them understand reporting requirements, such as those issued in California and the European Union. This may include developing impact reports that align with recognized frameworks such as the:
- International Sustainability Standards Board (ISSB)
- Task Force on Climate-related Financial Disclosures (TCFD)
- European Union’s Corporate Sustainability Reporting Directive (CSRD)
- And other standards to improve organizational accountability and transparency.
Fractional CSOs can also facilitate dialogue with internal and external stakeholders, including investors and regulators, regarding sustainability initiatives. They develop communication frameworks that establish transparency, gather valuable feedback, and build the organization’s understanding of its sustainability priorities.
Developing Internal Expertise
Over time, the fractional CSO can transfer their knowledge to management and internal personnel who are taking on sustainability functions so the company can better integrate sustainability expertise across the organization after the CSO engagement ends.
Many people want to work for employers that align with their personal values, and this often includes companies’ sustainability efforts. By leveraging these mission-aligned team members to carry out sustainability efforts, a company can gain direct benefits while enhancing employee retention and recruiting.
The Benefits of the Fractional CSO Model
Retaining a fractional CSO can provide operational and economic benefits:
- Cost Savings. Retaining a fractional CSO represents considerable direct savings over a full-time professional, especially for companies that are new to the space. This approach allows organizations to align sustainability leadership resources with their needs, and build a strong foundation for future internal sustainability personnel to execute on.
- Access to Expertise. Fractional CSOs bring substantial professional experience and knowledge that might otherwise be difficult for mid-sized companies to find or afford. Their broad understanding of sustainability practices enables the application of proven methodologies tailored to specific organizational needs, and provides a formal structure for engaging your employee base around key sustainability initiatives.
- Implementation Efficiency. Experienced fractional CSOs can efficiently assess a company’s sustainability baselines and benchmarks, identify priority areas for development, and implement appropriate strategies. Their practical approach focuses on creating repeatable systems and processes that can be developed rapidly and maintained by internal personnel over time.
- Strategic Integration. Fractional CSOs help integrate sustainability considerations into core business operations. They work to align environmental and social initiatives with organizational objectives, ensuring the company’s sustainability efforts complement and enhance its overall business performance, building specific roles and responsibilities into your team’s respective job descriptions.
Further Explore Fractional CSO Services
Enlisting a fractional CSO provides a pragmatic approach to sustainability leadership that allows organizations to develop and enhance their business strategy and sustainable impact programs while maintaining resource flexibility.
This approach is particularly relevant for mid-sized companies seeking to advance their performance through professional leadership without the investment and resource commitment of a full-time executive position.
To learn more about the benefits of retaining a fractional CSO for your organization, contact us.
