CSOs in the spotlight: 10 challenges sustainability leaders navigated in 2024

In Asia, CSOs Eco-Business spoke to highlighted how prominent international brands have watered down their environmental pledges in 2024 – a trend that prompted some to wonder if their own sustainability targets are over-ambitious or unrealistic. Some of the world’s biggest multinationals, including sustainability pin-up Unilever, rolled back their much-publicised commitments.

Eco-Business also tracked what CSOs have been saying about talent crunch in Asia. The picture isn’t rosy. Specialised skills and knowledge about sustainable business practices are still in high demand, and there are new and emerging concerns that could further hollow out the industry. 

Here is a list of 10 challenges that CSOs had to navigate over the past year: 

Trump 2.0

Most CSOs in Asia would have hoped that Donald Trump did not win a second term in the United States presidential elections in November. Trump 2.0 promises to quit the Paris climate accord again and anti-ESG sentiment is intensifying in the US – President Joe Biden’s administration has since set a new national target under the Paris Agreement to slash greenhouse gas emissions by 61 to 66 per cent below 2005 levels by 2035, a goal that officials describe as “achievable” by states even if Trump follows through on vows to reverse federal policies. Others say everything will still come to nought if Trump turns his back on these commitments.

The landmark Inflation Reduction Act of the Biden administration could also be rolled back. In an analysis piece post-elections, experts told Eco-Business Trump portends greater uncertainty for the clean energy sector in Southeast Asia, although existing momentum in private markets could carry the region through the next five years, bolstered by China’s support. 

Another Trump-related development: A US-spearheaded pollution tax targeted at China in the style of the European Union’s Carbon Border Adjustment Mechanism (CBAM), which places a levy on carbon-intensive goods, could speed up the decarbonisation of global supply chains.

Talent crunch

Is the sustainability sector “eating itself”? This was a question posed by recruiter Paddy Balfour of Acre at a Hong Kong business summit that Eco-Business reported on. After aggressively hiring sustainability specialists from consultancies, companies have found that there is a hollowing out of talent with specialist knowledge in the consultancy firms they are hiring, said Balfour.

Could this mean that consultancies are not worth the exhorbitant fees they are charging? Some think so. “Instead of working on the laundry list of other things you have to do, you also have train your consultancy,” said John Pabon, author of a book on greenwashing. Chen Y., sustainability manager at maritime transport firm “K” Line Singapore, noted that consultancies tend to “state the obvious and what is trending.” Consultancies bring value when there are no competent in-house people, but the value weakens rapidly after one or two years, she said.

Other CSOs identified an alarming knowledge gap among university graduates this year. Melanie Kwok, Hong Kong-based head of sustainability for property giant Sino Group, noted in an interview with Eco-Business that far too many young graduates are entering the workforce with limited or outdated knowledge. “It’s not easy to retain staff, particularly younger executives who realise that what they learnt at university is not applicable in the workplace,” she said.

Steve Newman of advisory firm Earthcheck said that companies expect a lot for very little, as sustainability roles are sometimes not seen as business-critical. Many companies recruit internally and either assign the sustainability function to a passionate or inexperienced person who has to learn on their feet or add it to an individual who works in another department. “If you put someone in the position who already has a primary role, they often don’t have the time to develop the knowledge needed to make informed decisins, nor the authority to engage across the management chain,” he said. 

Mark Cheung, co-founder of Hong Kong youth organisation Network of Environmental Student Societies, argued that young sustainability talent is being blocked from entering the workforce, because of poor hiring decisions and competence greenwashing. 

Social risks

2024 saw an increase in external social risks such as cyber insecurity, misinformation and disinformation, societal polarisation and the adverse outcomes of artificial intelligence, according to the World Economic Forum’s risk report. While the environmental pillar of ESG developed rapidly this year, with more progress seen in tightening environmental disclosure metrics and processes, the social side of sustainability measurement and accountability has some catching up to do, observed Newman of Earthcheck.

Scope 3

CSOs remained perplexed by how to accurately measure Scope 3 – or full value chain emissions. By their nature, Scope 3 emissions are out of a company’s direct control, and as a result, firms have been pushing back against measuring these emissions until the very last minute, when governance demands it, observed Newman. This puts CSOs and their teams under intense time and resource pressure to deliver, at a time when companies are focusing more on reducing expenditure and maximising profit margins, he said.

‘Hard-selling’ the sustainability agenda

CSOs that do not have a direct reporting line to top management struggled to sell the sustainability agenda in a year with many competing priorities. Some ended up with limited resources to tackle an increasingly diverse and complex set of risks, and struggled to motivate and engage individuals who do not have sustainability baked into their key performance indicators.

A lack of traction internally made it difficult for some companies to develop a consistent sustainability mindset and culture across the organisation. “Either sustainability efforts are within an isolated small group, activities are superficial and not business relevant, or the topic in itself is portrayed as confusing and too complex,” commented Tim Wieringa of Hive17 Consulting Singapore, which works with companies on business transformation.

Reporting burden

Though the consolidation of some sustainability reporting frameworks in recent years has eased the burden on CSOs and their teams, growing pressure on companies to report their biodiversity impact through frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD) has added to the reporting logjam and requires new skillsets and knowledge.

Anita Neville, chief sustainability officer for palm oil company Golden Agri-Resources (GAR), told Eco-Business that she has an entire team working on sustainability reports all year round, which eats into the real work of improving practices. Carolyn Lim, head of corporate communications at Musim Mas, said her company spends about US$1 million a year on sustainability reporting – money which could be spent on projects to bolster climate resilience or boost productivity. 

Burnout

The mental resilience of CSOs was tested in a year in which the role came under scrutiny for being poorly defined and under-resourced. CSOs are being asked to “spring a marathon”, noted Neville, in a special report on burnout earlier in the year. A global census of CSOs by recruitment firm Acre found that only one-third of respondents were very or moderately dissatisfied with the resources they have access to, while executives across all business sectors expressed serious doubts that they could meet their sustainability commitments with the resources at their disposal.

Target anxiety

In a year in which some of the world’s biggest multinationals – think Unilever, Coca-Cola, and Shell – rolled back climate or plastic commitments, there was heightened concern among CSOs that their sustainability targets were over-ambitious or unrealistic. According to a global survey of 300 companies by Bain, a consultancy, 98 per cent said they had failed to meet the objectives set out in their sustainability initiatives.

The pace of change in sustainability made working out what to do first harder for CSOs in 2024. “We are now under so much pressure to do as much as we can, as fast as we can, everywhere we can,” said Neville of GAR, noting that she can always see in her peripheral vision “things that are not done”. Prioritisation is critical, she said. “We have to be prepared to let some things go to focus on what matters most. And we have to have confidence in those choices or else risk things getting on top of us.”

Counterproductive criticism?

At a closed-door stakeholder dialogue to critique a Hong Kong-based consumer goods brand’s sustainability report earlier this year, the head of sustainability for a luxury goods brands said that criticism of corporate sustainability efforts was demoralising and potentially counterproductive. Every company’s sustainability performance is flawed, depending on which angle it is looked at, she contended. The overzealous criticism of sustainability commitments has in some cases diminished the appetite for sustainability in the boardroom and led to greenhushing.

Data quality

While some companies have stopped communicating sustainability claims for fear of reprisals, some CSOs gripe that they would communicate more if they had access to better quality data on which to make solid claims and set realistic targets. Poor data quality on sustainable performance has been cited as a top hindrance across multiple surveys in 2024.  

What else frustrated sustainability leaders in 2024? Let us know by writing to news@eco-business.com. This story is part of our Year in Review series, which journals the stories that shaped the world of sustainability in 2023.