By Federica Urso
(Reuters) - The number of companies appointing chief sustainability officers (CSO) jumped threefold in 2021 year-on-year, a study by consultants PwC showed on Wednesday, although less than a third of all CSOs hold an executive position.
The findings from a survey of 1,640 companies across 62 countries show the growing demand for dedicated oversight in corporate boardrooms as firms face a rising number of environmental, social and governance (ESG) challenges.
The number of CSOs holding an executive level position, alongside board members such as the chief executive or chief financial officer, hit 28% in 2021, more than tripling from 9% in 2016, it showed.
North American and European companies were more likely to appoint CSOs at first or second management level - 48% and 35%, respectively. Those in the Middle East and Asia Pacific ranked last, with just 14% appointing at a higher level of seniority.
"Having a CSO sit on the executive board or report directly to the CEO or another board member helps educate and upskill the executive team on evolving ESG issues," PwC said.
Despite more companies looking to appoint CSOs at a higher management level, about half of all CSOs are two or more notches below C-suite level, the report said.
The study also analysed the degree to which companies with a CSO are scored on ESG issues by external data provider Refinitiv, and found 98% of companies with a top rating had an executive with at least some sustainability responsibility.
"Having a CSO on the board sends a strong signal to investors, customers and employees that sustainability is a key consideration in both strategic and operational planning," said Carl Sizer, ESG Leader at PwC UK.