The unprecedented rise in regulation

The playbook for the sustainability executive is still being written. Whether you’re new to sustainability or an industry veteran, the landscape is changing fast, requiring all of us to adapt as quickly as possible.

As we publish the 2024 report, the rise in regulations in the U.S. and abroad is top of mind. Such rules are moving the communication of a company’s sustainability-related activities from a voluntary exercise to a mandatory requirement.

General counsels and chief financial officers are becoming more involved as sustainability data now requires the same assurance as financial data. New roles, such as the ESG controller, are being created to ensure regulatory compliance. What once was an exercise in corporate good is now becoming table stakes.

First published in 2010, the State of the Sustainability Profession looks at the evolution of the role of the sustainability leader in today’s business world.

Among the key findings:

• The number of corporate sustainability workers, both full-time and freelance, has been rapidly increasing.
• Salaries for sustainability professionals have grown more than in any time since we started publishing this report 14 years ago.
• Sustainability executives are rising in seniority within their organizations.
• More often now sustainability teams report to general counsels.

Excerpt: How companies are staffing for increased regulations

Headcount continues to increase within sustainability teams at large corporations as 74 percent of respondents reported increased staffing over the past two years, just 2 percentage points lower than 2022. Healthcare saw the biggest increase as 88 percent of respondents reported adding employees to their team.

Headcounts are increasing in other departments as well. We asked whether one or more dedicated sustainability resources were embedded within various functions.

The biggest increases show up in the finance and legal departments. The number of companies embedding resources in the finance department grew by 11 percentage points. Companies adding sustainability resources to their legal teams grew by 14 percentage points.

General counsels and CFOs are becoming more involved and new roles, such as the ESG controller, are being created to ensure regulatory compliance. The title “ESG controller” was virtually non-existent just two years ago. Twenty percent of respondents in our most recent survey indicated that their organization has created the ESG controller function.

While sustainability staffing in the supply chain was down by 10 percentage points (likely due to COVID-related challenges having faded), the number of employees embedded in procurement rose by 10 percentage points.

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Fuente: Trellis