In a 2013 landmark declaration¹ defining the financial sector’s role and tasks, the WEF warned that trust between the industry, its clients, regulators, investors and society remained fragile. All stakeholders must work together to ensure the financial system fulfilled its economic and societal role, it signaled.

Nearly ten years on, the Edelman Trust Barometer² reported that trust of the financial sector stands at only 56% among the general population. This puts it close to the bottom of all the sectors surveyed (only social media scores lower).

Nowhere is the imperative for sustainability stronger than in this wide-spectrum industry, and its leaders are striving to raise the bar.

But as a recent Amrop report³ reveals, any firm seeking to improve its sustainability performance faces an array of difficulties and strategic tensions. The Chief Sustainability Officer (or equivalent) has become a hub. And financial services leaders face a particularly stringent regulatory and ESG reporting environment.

The question of reporting lines is key to designing the role profile for a sustainability head, and no simple matter. The position was once typically part of the communications or HR team or a lone silo, but it is changing. In the case of Amrop’s client, the role had moved several years ago from Corporate Communications to Asset Management. The decision was made that the function should keep reporting into one specific business area, despite its groupwide responsibility.

The new Sustainability Head would lead a dedicated team of four people, collaborating closely with a separate team of ESG analysts.

To compensate for not being part of Executive Management Team, the Sustainability Head would also run a Sustainability Committee, composed of all the group’s business line heads (members of the Executive Management team). As such, the attention of top management is secured and the role mandate supported when it comes to driving the sustainability agenda. The Committee also ensures that the role stays plugged into the business, the organization’s long-term perspective and its ambition to be a role model within sustainability.

A further shift concerned the components of ESG. E (Environment) and G (Governance) are now running trains in many organizations. Indeed, our client’s focus is sharpening on the S (Social). Candidates would therefore be sought with experience working with the societal aspects of sustainability.

Searching questions

“The fact that the role was not part of the Executive Management Team would impact candidate interest – especially seniors with leadership weight.” says the lead Amrop Partner. “We had an open dialogue with the client concerning the pros and cons but in this case they confirmed that the business would be better served with sustainability as part of Asset Management.

“Our task was now to present the role in a way that would attract senior candidates. For example, we presented the Sustainability Committee and the positive reasoning behind this.

“The second argument concerned governance. Many organizations have seen a proliferation in specialist roles. This has led to an expansion in the number of people sitting on executive management teams. As a response, many are deciding as part of their governance to keep the top team compact. Our client was no exception.

“Another attraction point is that the group’s sustainability team is building (even if it will remain centrally tight, as the business ultimately owns decision-making and implementation).

“Finally, and irrespective of where it sits in the organization, this remains a high-profile leadership and change management position. It is a heavyweight role that is anchored in the business. The head of sustainability runs a strategic committee and drives change across different divisions. Even if the role holder has expertise in sustainability and regulatory frameworks, he or she must also transcend this niche.”

Following a ten-week process, the successful candidate was recruited.

The new Head of Sustainability for Amrop’s client is an economics major with board experience. Their most recent position was as a division head of ESG for a leading corporate bank, a role successfully executed for several years, resulting in:

• Business experience
• Leadership experience
• Sustainability experience
• Business development skills

The successful candidate strongly believes that business acumen is critical to integrating sustainability into a mature organization, combining domain expertise with change management skills and a firm grasp of business dynamics.

Our client’s new Sustainability Head is confident that the organization has the momentum to navigate the waves and act as a sustainability example in their industry. We wish the new executive well!

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