Ep 25: How Chief Sustainability Officers advance sustainability storytelling
In this episode, Mike Hower sits down with Erik Hansen, Chief Sustainability Officer at Workday, to explore how CSOs have evolved into the lead communicators for corporate sustainability. Erik shares insights on building trust through transparency, making the business case for sustainability initiatives, and how companies are increasingly being asked detailed sustainability questions in hundreds of RFPs. The conversation covers practical strategies for working with legal teams on compliant communications, measuring the success of sustainability storytelling, and thinking beyond company silos to advocate for industry-wide change. Erik also discusses Workday's approach to carbon markets, their $25 million commitment to Frontier's carbon removal initiative, and why connecting sustainability efforts to core company values often trumps pure business case arguments.
You can also listen to this episode on Spotify, Apple Podcasts, Amazon Music, and YouTube.
Transcript
What's the role of a Chief Sustainability Officer in communicating sustainability today? Let's find out.
Mike: Hey everybody, and welcome to The Sustainability Communicator—the podcast that dives deep into how companies can better tell their sustainability stories and drive real impact. I'm your host Mike Hauer, and I've spent the last 15 years living and breathing sustainability communications, first as a journalist for GreenBiz and other outlets, and then in the corporate world, helping global companies craft and share their sustainability journeys.
Each episode, we cut through the jargon and greenwashing to explore the real challenges, risks, and opportunities in sustainability communications. We'll hear from leaders who are walking the talk and learn how they're navigating this complex landscape. Whether you're a sustainability professional, communications expert, or just someone who cares about how businesses are addressing our world's biggest challenges, you're in the right place. Let's get started.
Today I am excited to invite on the pod, my friend Erik Hansen, the CSO of Workday. Most of us have heard of Workday. We may have used it indirectly or directly in our companies. But Workday is an AI platform for managing people, money and agents. The platform is built with an AI first model to help customers elevate people, supercharge their work and move their business forever forward, according to their boilerplate. It's used by more than 11,000 organizations around the world and across industries from medium sized businesses to more than 60% of the Fortune 500, which is why you've probably heard of them.
So Erik, thanks for being here today. To start out, I'd love to know just what does sustainability look like at Workday?
Erik: Yeah, I mean, we're focused on what is most important for us as a tech company. We're not manufacturing widgets. We're zeros and ones in the cloud. So it's honestly energy and carbon emissions. So we're really focused on climate. We're really focused on helping our customers achieve their sustainability goals. That is the lens by which almost everything we do around sustainability is applied.
Mike: And so that all makes sense. And it's very typical of a tech company. How do you go about communicating sustainability to your stakeholders? And maybe you could maybe start with like, who are your—you have your customers or probably, assume are your top stakeholder group, but you know, like how do you determine who's the most important audience? And how do you approach communicating sustainability to them?
Erik: Yeah. I know it's gonna sound trite, but I gotta lead with this. Our core values really guide everything that we do. One of those core values is integrity. I'll talk about that in a little bit. If you think of the key stakeholders, it's customers first and foremost for us. Investors, shareholders, prospective customers, our employees who we call our workmates. All key constituents that we're looking to communicate our story. And that story is gonna differ depending on the different stakeholders that we have, right? But all of them, I mean, if you think about this space, they're demanding greater transparency around sustainability, even in the face of challenges, right? And so when we're communicating our efforts, we're really trying to show all of those stakeholders that we're operating with our core values in mind.
Mike: Mm-hmm.
Erik: So again, integrity and innovation are two of our core values. And we think that, for sustainability specifically, those go hand in hand. You know, for integrity it's like how do we do right for our employees, our workmates, our customers, the larger communities that we impact, you know, beyond just protecting our planet, but on the social side as well. But on the innovation side, you know, we're looking how do we innovate in a way that we form partnerships, scale sustainable innovation, scale sustainability beyond our four walls. And we want to be transparent about that. We wanna share our story with our stakeholders. Here's what we're trying to do. Here's how we integrate sustainability into what we're doing. Here's how we measure success, not just in financial terms, but how we impact the world.
Mike: Mm-hmm.
Erik: You're also trying to make sure, you're sort of establishing trust, right?
Mike: Right.
Erik: And you know, the way that you do that is you share not just your wins, but your areas where you need to improve. When you have efforts that, are falling short—these are often global challenges that any one singular organization is not gonna solve. And you know this. The challenge then becomes, all right, well, what are you doing to play a role in solving that unique challenge? And how do you illustrate that for other people? So we want our customers, our employees, you know, investors know that we're committed to those and we wanna be transparent about the steps that we're actually doing. So we can build that credibility.
An example of this—the challenges specifically around communicating sustainability are in the voluntary carbon market. We are a player there. We communicate in our traditional global impact report, which is your sustainability, you know, report—your GRI based report, blogs, other forms of communication. One of the things we're clear about is like carbon credit projects are not all created equally. And there's a lot of scrutiny in the market around specific carbon credit project types. What we're trying to do is say here's some established methods to identify high impact, highly, what they call additional. So projects would not happen outside of carbon finance, innovative solutions. We prioritize those projects. We make sure that there's social impact in addition to the environmental impact. But then we wanna share our learnings externally. And part of our communication strategy is how do we get that message out there?
One example we partnered—we co-developed a carbon credit playbook for Chief Sustainability Officers together with a company called Patch.
Mike: Hmm.
Erik: And it covers everything from how you connect your sustainability strategy to your business strategy, to carbon credit procurement specifically. Here's how you build a portfolio of projects. Here's how you do what are called multi-year offtake agreements, where you're not buying over the counter, but you're doing multi-year purchase agreements to kind of stand up nascent projects that otherwise wouldn't be funded. Here's how you use an internal price on carbon. Essentially trying to put a playbook together to help others navigate a tricky area, which is the voluntary carbon market. From a communication standpoint, we view our role as a way to sort of like illustrate and inspire others. And those are the folks that we tend to try to reach for. And then, you know that way that we do that is to put together white papers or other thought leadership that we put out into the space, talk about at conferences, et cetera, as opposed to just purely throwing stuff on a blog, throwing stuff in the global Impact report.
Mike: I love that. And I think to me that's like the highest form of sustainability communication is when you're actually putting out real thought leadership that's helping others. You're not just out there tooting your own horn. Here's the challenge. Here's how we're addressing, here's how you can too. That's great.
I would like to riff on that a little bit too, but the whole idea of helping companies make the business case. I think right now we're in an interesting time. We don't need to get into politics, but in corporate sustainability some have said we're in a quote unquote downturn. Whether or not that's true, it's definitely always been important to make the business case for sustainability. It's more important now probably than ever. How do you go about communicating the business case? I know you said you had that white paper for the specific carbon markets, but, do you have any key learnings of how you make that connection? Sometimes the connection isn't super clear, what do you do then? How do you approach that challenge?
Erik: I think first and foremost, connecting to your values is the most important. The difference between being told yes versus being told no to a particular initiative can be a values play. This aligns with what we're trying to do as an organization. The business case is important. We beat that drum pretty heavily in this community for a few decades now and it doesn't go away. I think in some cases it's actually really easy to connect the business case. I'll give you an example. Renewable energy, right? You can do offsite, utility scale, power purchase agreements. You can do onsite renewable energy. In most cases, we're headquartered in the Bay Area in California. In almost every scenario, there is a really nice financial case for doing onsite renewable energy paired with battery storage. You know, you can walk your finance team through the internal rate of return on that. It may be a longer time horizon than every finance team wants, but there's a rate of return there and it looks promising.
Mike: Mm-hmm.
Erik: And then there are other cases where it's gonna be much softer, right? If we're net zero or balancing out our carbon footprint. So in our case, you know, Workday has been operating at a hundred percent renewable electricity matching across our global operations, both data centers that we lease space in, and offices, globally since 2019. We have a net zero carbon emission commitment that we met in 2020, which covers all of our emissions from our offices, our data centers, our public cloud providers, and our business travel, roughly about a third of our total global footprint. We have science-based emissions reduction targets. First reduced then, then offset on the mitigation of residual emissions through carbon credits. It's a much softer business case.
What you're doing is tying it back to all of the various customer and prospective customer requests that we get, the RFPs that we receive, that say, what are you doing to mitigate the footprint of your emissions or your goods and services that you're providing us as a customer, right? That question gets asked to us and we can turn around and say, look, we've got hundreds of RFPs that have come through this year that are asking this question, and we are a significant part of the value chain for many of our customers. If the cost of mitigating these residual emissions through, innovative carbon credits, carbon removal, et cetera, you can sort of make that direct cost. You can add up the TCV of these deals that are in the pipeline and say these deals may not be happening without us mitigating those residual emissions. So you can try to make that connection.
Mike: Mm-hmm.
Erik: And then honestly, when all else fails, I think having a strong value system. For us, you know, our core values, it's our employees first and foremost, it's customer service. It's, you know, innovation, it's integrity, it's profitability. You know, we can make that connection to customer service. We know that employees increasingly care about this. We can talk about profitability, especially when it comes to things like renewable energy projects that save us money. Again, understanding what your company's intrinsically motivated by from a values basis and then making that connection, often trumps the pure business case.
Mike: That's a beautiful answer. I'm gonna remember that and tell that to my clients a little bit. We wanna bumper sticker.
Erik: Mike.
Mike: Kind of going back to the sustainable RFP. We've been hearing a lot more about this, I didn't realize in the hundreds. That's, that's actually really encouraging to hear. Is it typically just a single question that asks about your carbon or what does it usually look like? This is something I've been doing some more research into, but I'd love to hear since you're in the trenches dealing with these RFPs. What do they typically look like and what kinds of questions are they asking?
Erik: I think it's changed over the years. I've had the privilege of being in this position at Workday for a little over 10 years now, been at the company for 15 years in June. It's changed over time. 10 years ago, a lot of these questions that were coming in RFPs were simple. Do you have a renewable energy goal? Or not even that? Are you buying renewable energy? Yes. And now you're getting these really nuanced set of sustainability questions around renewable energy, around emissions targets, around how you're mitigating any residual emissions around procurement practices. These are much more detailed and they're asking really thoughtful questions, and I think it's great from a sustainability practitioner's point of view. What you're seeing is, I think the soft business case 10 years ago may have been, the world cares about sustainability broadly, our business should care about this, our customers care about this. But you didn't necessarily see as much of that direct connection especially for companies that are not necessarily providing a very inherent, sustainable good or service.
Mike: Right.
Erik: Whereas now it, you know, you're literally hundreds, hundreds of these, right. And you're getting CDP questionnaires, supply chains. CDP questionnaires, that are saying what are the direct emissions for your goods and services that you're providing to our customers? Right. I think that is an area that is only going to mature and increase. At some point, you're gonna stop seeing one-off questionnaires. You're gonna see much more of a centralized process for that, maybe a clearinghouse. Whether that's like a CDP or EcoVadis where companies don't have to do these one-offs.
Mike: Right.
Erik: As a company, you know, we have a workday solution for supply chain management. Right. And we actually have a supplier sustainability solution that we built on top of that platform or that application.
Mike: Mm-hmm.
Erik: Where we can actually, and my team does this. Jonathan Sim on my team is great. He worked with our internal team to develop and tailor that solution so that we can go out to all of our suppliers, survey them, get real data, return that, aggregate that in Workday, prism Analytics, and then do our reporting on dashboards built all on top of Workday, and it's fantastic. But I mean, honestly, the future, 10 years from now, I'm hopeful it's not gonna be every company going out and doing these unique surveys, and they'll be much more of a sort of a like a centralized clearinghouse approach. A more standardized set of questions that everybody will be asking. Right. They're asking the questions. And that's the difference between 10 years ago, we're getting those questions and it becomes a business driver that perhaps it wasn't, 10, 15 years ago.
Mike: Yeah, and I've been seeing some jobs pop up where the job is to train the salespeople on how to talk about sustainability. They need to be having these conversations with their potential customers. Not even just disclosing the data, but like how do you talk about this in an intelligent way? So, very fascinating. So I'm kinda moving on. So, you know, you're actually the first CSO I think I've had on the pod. Hopefully not the last. But the role of the CSO has really changed a lot in the last, I mean, I'd say even the last two years, but, you know, the last 10 years for sure. I know you haven't been a CSO over 10 years, but there's been a couple articles that came out last year. Ellen Weiner put out a report—she puts out her annual CSO report that talks about trends in CSOs, and one of 'em is that they've become kind of like the lead communicator for sustainability at companies. Which makes sense. Cause if you're the CSO, you should be. In your role as CSO, how have you found the responsibilities for communicating your sustainability story changing and what kinds of conversations are you having with the leaders at your company? How does your role as CSO factor into how you tell your sustainability story?
Erik: That's a great question, Mike, and I'm sure you'll have many other CSOs.
Mike: Gonna scare them all away after this interview.
Erik: I'll open my Rolodex. So that's a great question. I think most CSOs—sort of part of the mandate for being a CSO, you know, being pro and certainly for me being promoted into that role is around communication. How are we interfacing with our customers, our prospective customers, specifically around sustainability? So that's number one. Number two is internally, there's an expectation that a CSO will be sharing our sustainability message broadly with our internal stakeholders.
I think where that tends to show up in conversations with our peers is less the employee engagement opportunities, frankly, what you might typically think of, you know, the green teams and the like. Although we still do that and that's fun. It's perhaps not why someone is elevated to a CSO role. The reason you're elevated is because you're gonna be in front of the board of directors. The CFO, you're gonna be in front of, you know, the chief legal officer. You're gonna be in front of the C-suite, and you're gonna need to understand real business issues critical to each of those leadership stakeholders. And you're gonna need to speak their language and they're gonna need to see you as somebody deserving of having a seat at the table.
I'm really thankful in the years that I've been at Workday to have developed really good relationships with our C-Suite. Our leadership is definitely supportive of the work that we're doing around sustainability. But I think that role specifically entails being able to have direct communications with the C-suite as needed. Externally, you're the face of the organization. I don't think a lot changes say between, if you have somebody leading sustainability at your org that doesn't have the CSO title, but they lead sustainability.
Mike: Mm-hmm.
Erik: I don't think much, frankly, changes if I'm being honest. But I think the expectation is that you are out there and that you are sharing your story. And I think the expectation and the approach that we have at Workday is not just sharing our story, but really trying to inspire others. We may have 70 million people using our platform, but if I'm being honest, we're not at the size of a hyperscaler like a Microsoft, right?
Mike: Mm-hmm.
Erik: So in terms of pure moving markets from a sustainability aspect just because our footprint isn't that large. Right? So how do we inspire change? That's where we have to be out there leading. My job in many ways is going out and talking about some of the inspiring work that we're doing so that other fast followers, other tech companies, other peers, other organizations can look at what we're doing and go, there's an approach that I can take as well. That's how we get this flywheel going of innovation and change in sustainability, not just from unilateral actions. Right. And I can give you some examples around that if you need to.
Mike: Yeah. I love the thought that you know, you don't have to have a CSO at your company for this to be the same challenge. A lot of companies don't have CSOs. The structure varies. Some companies I work with. The highest person for sustainability is a manager. And they answer to the chief legal officer. So how do you do that in that instance? Um, so I think, yeah. The purpose of this pod too is to kinda let people know, like you could be C level, you could be manager level, but you still have the same responsibilities for communicating sustainability.
Erik: That was me for many years.
Mike: Yeah.
Erik: Yeah.
Mike: Great. I think we touched on this a little bit, about how you measure success with sustainability communication. With the RFPs if you're winning a lot of business, you probably are doing a good job. That's part of it. What are your KPIs for knowing if you're telling your sustainability story effectively? Do you have any feedback mechanisms for that? How do you know if you're doing a good job?
Erik: I think on the story specifically, that's always gonna be a challenge. How do you measure that effectively? Put out a blog post. I can measure how many clicks I get. You know, but like, is that a measure effectiveness or is that right? How many clicks I get. I think some ways it comes back to the general KPIs, right? Are we winning business? Are we hitting our targets? Are we hitting our carbon goals, our science-based targets? Are we making an impact? How do we measure that? I think it's always tough to understand, how you're landing on the communication very specifically.
That said, some of the ESG rankers and raters, rely on voluntary disclosures that you may be putting out there and things like impact reports. That's a soft way of measuring your impact. Those are always imperfect by the way. Some rankings, we've been the number one company for environmental sustainability some years and then, we fall down the rankings the next year and the methodology changes and that's totally fine. I think, sustainability is always a journey. Not a destination. And it's the same thing on the storytelling is like you're constantly trying to learn the best ways to get your message out there. I really find value in collaborating with others and trying to lean on others to get the message out there. Right? If it's a case study that will be widely used by a trade association that will, they get in front of all of their members and understanding if that thing is getting clicks and getting used, I think that's valuable.
Mike: Mm-hmm.
Erik: I think it's always a challenge to measure sentiment. Frankly, probably not my area of expertise, being honest.
Mike: It is a challenge with all comms and marketing in general. Measuring success is, it's not like you're cutting carbon emissions that you can clearly measure, right? A question did pop in my head as we were talking about the, compliance piece. It's been increasingly important for companies to put out compelling and compliant communication. Obviously you're not so much consumer facing, so you're not putting out as many messages to general audiences, but you're still, subject to many of these new regulations around greenwashing, things like that. Have you found that you've been working more closely with your legal teams in recent years around communication? How does that process work there? How do you integrate with your legal team to put out your communications across sustainability?
Erik: Well, I mean, number one, I'm fortunate enough to, sit within our broader corporate affairs team, which sits within legal. So legal compliance and corporate affairs, what we call LCCA. We work hand in glove with the legal team and have a really strong relationship with, folks across legal generally. The thing is, I also have the privilege of, we sort of have, a, a member of our sustainability team who sits within our go-to market legal team. So she's halftime more sustainability. The other half of her time, is based on the, go-to market, contract negotiation process for prospective customers. She does fantastic work. Her name's Magali Romero. She runs point on, taking a look at the EU legislation around, bringing claims and making sure that we're in compliance.
Similar to other organizations, that Impact Report always goes through a legal review. Our chief legal officer is. Very hands-on when it comes to that impact report, which is fantastic because now we have a member of the C-Suite who's really. Taking an interest into what we're putting out there around sustainability, which is fantastic.
Mike: Mm-hmm.
Erik: You have to develop that, relationship with legal and it can't be adversarial. Bring them in proactively. Bring them in early. Making sure that they're reviewing data, making sure they're reviewing the claims that you're making, and then it becomes sort of a two-way street, right? Because then when you're developing, say like. Proxy statement, right? The legal, the regulatory affairs team is gonna reach out to our sustainability team and say, Hey, here's some of the language that we have in the proxy. Does this look great? It becomes teamwork as opposed to, one sustainability team, just throwing it over the fence to legal.
Mike: Right.
Erik: You don't want that.
Mike: Yeah. And I've seen that firsthand. If you don't have that good relationship with legal, they tend to just kind of go to town on anything you create and make it as safe as possible. But then that, that's why I say compelling and compliant. Cause it's, there's sometimes a tension there. But if you can build that trust with legal, then generally they trust you more to put out more interesting communication that isn't so legalese. So, yeah, that's really interesting. Don't operate in a silo if you're a sustainability communicator.
Erik: Don't operate in a silo if you're a sustainability communicator.
Mike: That is the tagline of the episode. Cool. To wrap up. I know, you've done a lot of great advocacy work at Workday which again, not to get super political today, but it's gonna be more important than ever over the next few years. I'd love to hear a little more about, you know, first of all, like, why does Workday participate in this kind of activity? And then, maybe just talk a little about some of the things that you've done, while at Workday to advocate on, various sustainability, policies and measures.
Erik: Yeah. It comes back to core values and alignment with values. So if we're gonna be advocating for anything, we're gonna make sure that it strongly aligns with what we value as an organization. And if there's a value alignment there, then it's something that we will consider.
Mike: Mm-hmm.
Erik: We put out a climate policy that, you know, we put out on our website, you can go read it, anyone can go read it's PDF. That basically lays out the framework of how we think about climate policy and advocacy around that. What are the key areas that we're interested in? And again, we think like putting it out there, being transparent. Rooting it in your values is, is just a smart way to build stakeholder trust. Again, I have the privilege of sitting within a broader legal, or corporate affairs team. And so that's what our corporate affairs team, I think of that as, as sort of government affairs. They're building relationships, understanding what's on the horizon with respect to policy, climate policy, renewable energy policy, making sure that we're advocating for smart policies that are workable, that, help the world achieve, a 1.5 degree future.
I think where I think advocacy can be really important too, is again, sort of almost like highlighting innovative ways with other organizations around what you think is a sensible approach going forward in, in sort of key areas. And I'll, I'll give you an example, I think of advocacy even more broadly than just policy or signing a letter, right. And we're members of series, you know, bicep group or we get involved, with a lot of the trade associations that most corporates are involved in, that are advocating, on behalf of corporates and climate, right. Think of things like, carbon removal. The special report on 1.5, from the IPCC back in 2018 essentially said we're gonna need five to 10 gigatons of carbon removal to reach net zero by 2050, right? There's no trajectory that doesn't allow for carbon removal.
So, we joined Frontier, which is an advanced market commitment over $1 billion. A handful of companies, including Workday, are essentially saying like, Hey, we're gonna play a role in trying to accelerate the development of carbon removal technologies because we know it's gonna play a role from a science standpoint in the future. There's not enough investment. How can we collaborate and join a group to accelerate that deployment and development? We're $25 million of that $1 billion and we're out there buying, first of its kind carbon removal from. Small startups that are trying to pilot and identify promising technologies that can scale up.
I view a lot of that work, frankly, is, is advocacy. And yes, you know, when they deliver carbon credits, we will retire those against our footprint and make, claims around mitigating those emissions. But if we're being honest, that's essentially advocacy work we're advocating for carbon removal technologies and, trying to stand up this nascent industry. I think companies in general can think more broadly when it comes to advocacy. You can attach your brand to important, impactful values, driven work. Signing a letter, right, do the work, show the work, not just, put your brand out there on a, on a, on a sign, on letter. So yeah, that's sort of like the, the approach we're taking. We try to do the same thing with, you know, everything from sustainable aviation fuel to decarbonize the aviation sector all the way to our work with plugging, orphaned oil and gas wells.
It's really important work and I think you can attach yourselves to that. You can, work with other organizations that are like-minded and, and that becomes your sort of advocacy play as opposed to the traditional routes.
Mike: I love that approach. I think it's the first time I've heard someone talk about it outside of a, you know, we tend to think of advocacy as like, go to Capitol Hill and do lobby days. That's part of it. But what you're getting at is that advocacy is just getting, kinda you were talking about earlier about don't be in a silo within your organization. This is almost like don't be within your company's silo, We're operating in a larger world here, so you know, if just because workday achieves net zero doesn't mean anything if the rest of the world doesn't. And so thinking in terms of which is I think one of the biggest criticisms most of us sustainability professionals have of our industry is sometimes we're so focused on our own organizations that we don't realize, none of this matters if we don't all succeed. Sometimes I'll encounter, especially big CPG brands, there's a lot of competition, and so they don't wanna, like, I. Have pre-competitive conversations all the time about sustainability. I'm like, well, guys, we're on the same team here. I get it, it's like the industry's charged more competitively. But yeah, I love this idea of finding ways to get outside of your bubble to advocate for, technologies or policies that will uplift everybody. And not just think about, you know, how am I gonna decarbonize my own supply chain? Cause you're not gonna be able to decarbonize it unless you have all these other broader. Factors coming into play too, right? So
Erik: 100%.
Mike: Cool. Awesome. Well, this was a great episode, Erik. I feel like we definitely got a couple other episodes in us, so maybe we'll have to do a follow up in a couple months or next year. But yeah, thank you so much for your time today and, keep up the good work and, congrats on being the first CSO on the pod.
Erik: It's an honor and a privilege, Mike
And that brings us to the end of today's episode of the sustainability communicator. I really appreciate you spending this time with me today. Diving into these crucial conversations about sustainability storytelling. If you'd like to stay connected. You can find me. Mike Hauer on LinkedIn. Or subscribe to my monthly engaged newsletter, where I share deeper insights about sustainability communications and what's moving the needle in our field. All the links are right there in the show notes. Speaking of staying connected. If you're finding value in these conversations, I'd be incredibly grateful. If you could spread the word. Share this episode with a colleague who might benefit from it, or take a quick moment to leave us a five star review on apple podcasts, Spotify, or your preferred platform.
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