Key Impact Points:
- Rising Regulations: 74% of companies reported increased sustainability staffing in response to a surge in sustainability regulations globally.
- Growing Seniority: Sustainability executives are taking on more prominent roles, with 30% now reporting directly to the CEO.
- Evolving Roles: New positions, such as ESG controllers, are emerging to ensure compliance with mandatory disclosures and regulations.
In 2024, the sustainability profession has reached a pivotal point, driven by the rapid increase in regulatory requirements. The eighth biennial State of the Sustainability Profession report, published by Trellis, highlights how the role of sustainability leaders is evolving to meet these new challenges. What began as a voluntary focus on corporate responsibility is now an essential, regulated aspect of business operations, requiring expertise and leadership across organizations. You can access the full report here.
The Rise in Regulation
Over the past two years, sustainability reporting has shifted from a voluntary exercise to a mandatory requirement in many regions, including the United States and the European Union. Regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and new climate disclosure rules in California are prompting companies to develop robust sustainability reporting frameworks. As these regulations expand, general counsels and CFOs are increasingly involved, ensuring that sustainability data receives the same scrutiny as financial disclosures.
The report reveals that 20% of respondents now have an ESG controller in their organization—a role that was almost non-existent two years ago. These professionals are critical in navigating the complex regulatory landscape and ensuring compliance with sustainability-related legislation.
Sustainability Staffing Growth
As regulatory pressure grows, so does the demand for skilled sustainability professionals. According to the report, 74% of companies increased staffing in their sustainability teams over the past two years. This surge in headcount reflects the importance of sustainability in business strategy, as companies respond to the need for more thorough data collection and reporting.
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The healthcare industry saw the largest staffing increase, with 88% of respondents in the sector reporting the addition of new sustainability positions. The finance and legal departments also saw notable growth in sustainability resources, with companies embedding dedicated sustainability staff in these critical functions.
“The role of sustainability professionals is no longer confined to corporate social responsibility. It is now integrated into the core of business operations, especially as regulations tighten,” noted John Davies, President of Networks at Trellis.
Seniority and Influence of Sustainability Executives
One of the most significant trends identified in the report is the rise in seniority of sustainability professionals. In 2024, 30% of sustainability leaders now report directly to the CEO, up from 22% just two years ago. This shift underscores the growing importance of sustainability at the highest levels of corporate governance.
Sustainability leaders are also becoming key advisors to the board, with 31% of respondents stating that they brief the board annually on sustainability risks and progress, and 30% providing quarterly updates. This regular engagement with senior leadership demonstrates the critical role sustainability plays in managing risk and ensuring long-term business resilience.
Meeting the Compliance Challenge
The growing complexity of sustainability regulations has led to an increase in the hiring of specialized roles. The emergence of positions like the ESG controller reflects the need for companies to build robust internal systems to manage compliance and ensure accurate, auditable data.
Sustainability executives are also preparing for the next wave of regulatory challenges, particularly around Scope 3 emissions—the indirect emissions that occur throughout a company’s value chain. With regulations increasingly requiring companies to report on these emissions, sustainability teams are focusing on data collection and management across global supply chains.
Conclusion
As sustainability continues to be integrated into business operations, the profession is at a crossroads. The 2024 State of the Sustainability Profession report shows that while the number of sustainability roles is growing, so too is the responsibility. Regulatory compliance is no longer a peripheral concern but a core aspect of corporate governance. The question remains: will companies simply meet regulatory requirements, or will they take the lead in driving positive environmental and social change?
With sustainability leaders increasingly taking on senior roles and new positions like ESG controllers emerging, the future of the profession is one of growth, influence, and significant responsibility in shaping a sustainable business landscape.
Related Article: Navigating the Evolving Landscape of Sustainability Disclosures: Companies Face Growing Complexity from Overlapping Global Regulations
