General Motors chief sustainability officer Kristen Siemen has discovered the best background for a CSO, and it’s probably not what you thought it was.
The most effective CSO profile is not necessarily someone who reports to the CFO or a company newbie. At least in manufacturing and product-driven companies, Siemen told me, the ideal profile is a longtime employee who is steeped in product development and engineering.
For the 29-year veteran of GM and an engineer, it also happens to be her profile. But when CEO Mary Barra suggested she give the role a try, Siemen hadn’t yet realized why her background made sense. “I asked: ‘Why me?’” she told me in an interview. “I didn’t know anything about [sustainability].”
Once on the job, however, Siemen—who had previously held such titles as “executive director, Toluca regional engineering center” and “global functional leader, electrical systems”—quickly realized how valuable her experience was. “From a GM perspective, everything that we need to do starts with the product,” she said. “We need to think about how to design, procure, and produce it.”
Having worked in GM plants and knowing how products are made enabled Siemen to implement the company’s decarbonization plans relatively quickly. By 2035, the car manufacturer wants to be “zero combustion” across its value chain. Then, all GM cars produced will be electric and all the energy it uses will come from renewable sources.
That means everything at GM, from R&D and product design to sourcing and production to consumption and end-of-life, has to be reengineered with sustainability in mind. “For a product engineer…if you’re not thinking of sustainability from day one…By the time, you’ve integrated [it], it would be way too late,” she said. “It’s been an advantage to have that experience.”
So take note, manufacturers: “Any consumer product company would benefit from having CSO in product development, manufacturing, or innovation,” Siemen said, as opposed to finance, which could be too limiting. “Finance is a huge partner for us,” she said, “but sustainability is a business strategy. Finance is just one piece of it.”
There is a second aspect to her CV that helps Siemen in her role as sustainability leader: her longstanding connections within the company.
Usually, CSOs don’t formally run departments. Instead, they often achieve results through collaboration, and for that, having relationships matters. “The advantage is that I’ve been at GM for 29 years,” Siemen said. That allows her to “leverage those relationships…[to] accelerate our journey…and weave sustainability in everything we’re doing.”
Given GM’s progress on sustainability, Siemen’s point of view is convincing. After having been caught off guard by Tesla and other pioneers, GM is now quickly catching up on electric vehicles. In the first half of 2023, 50,000 GM EVs rolled off the production line. In the second half of this year, that number will double, and by 2025, the company’s EV production capacity will be 1 million, the company told me.
GM is not showing any signs of backtracking on its 2035 all-electric goal, either. A big reason for that, Siemen said, is precisely how early in its product development it is now baking in its all-electric strategy. Key to that is its Ultium battery, Siemen said, which GM can use in its entire range, from Cadillac luxury cars to Hummer SUVs.
I was surprised to read GM is part of a car manufacturers’ lobbying group that pushed back against the Biden administration’s plans to call for 60% of all new cars sold in the U.S. to be electric, however. It’s one example of many where companies that are dedicated to sustainability fall short of consistency, at least on messaging.
Ultimately, though, I buy Siemen’s view that the sustainability approach at GM works because it’s become core to the company’s identity. “It comes down to who we are and what we are as a company and what we stand for,” she said. “It’s part of culture and strategy.”
For another testimony on how to bake sustainability into the corporate culture, by the way, join us next week for our “Sustainability 101” interview series with Salesforce’s chief impact officer, Suzanne DiBianca. You can sign up here. The session takes place Wednesday, July 19, at 12 p.m. EDT. And if you want to hear from Siemen directly, join us at Impact Initiative in Atlanta, Sept. 12-13. Register here.
Peter Vanham
Executive Editor, Fortune
peter.vanham@fortune.com
This edition of Impact Report was edited by Holly Ojalvo.
ALSO ON OUR RADAR
INBOX: There are five CSO archetypes and one you should avoid (PwC)
Does your CSO have impact, or not? According to consulting firm PwC, the answer, at least partially, depends on what “archetype” a company chooses. There are five, in PwC’s reading, and one of them is to be avoided: the CSO who reports to a “support function” such as compliance; human resources; communications; or environment, health, and safety.
The other CSO have a bigger chance of success, starting with the “CEO-CSO.” That one makes sense, as does the “C-level CSO.” Two other types can work too, PwC found, but they rely on informal stature, rather than their place in the hierarchy. They are the “stand-alone function CSO” who is not part of the C-suite and doesn’t report to the CEO, and the “core business function CSO,” who, like Siemen, is located in a core business function like operations.
“Where the CSO sits in the organizational structure is critical to success,” the report authors say. “Ideally, the CSO will lead a dedicated sustainability function, tasked with taking a holistic approach to ESG and covering all the significant environmental and social impacts of a company’s operations and processes...In short, the CSO’s role is to ensure that ESG becomes integral to financial value.”
