Beyond Compliance: Leveraging Sustainability as a Competitive Advantage with Sorouch Kheradmand

In this episode of our podcast, Maximilian, co-founder of The Sustainability Circle, sits down with Sorouch Kheradmand, Global Head of Sustainability at Schneider Electric, to explore how businesses can move beyond compliance and leverage sustainability as a competitive advantage. Sorouch shares insights on integrating sustainability into core business strategy, aligning it with growth opportunities, and overcoming common challenges in the transition from compliance to value creation.

Topics covered include:
• Shifting sustainability from a cost center to a business driver.
• Making the business case for sustainability to executives.
• Embedding sustainability into product innovation and supply chains.
• Overcoming communication barriers and engaging decision-makers.
• The future of sustainability leadership and the evolving role of CSOs.

Timestamps:

01:50 Sorouch's Sustainability Journey

09:30 Sustainability as a “Business Topic” and the role of CSO

13:56  Integrating Sustainability as a Strategic Advantage

18:51 Looking at Products and Systems

24:35 The Importance of Approaching Sustainability with a Business First Mindset

29:35 How to Look at and Communicate Sustainability as a Value Driver for the Business

35:04 Sustainability and Its Role for Innovation

38:52 Making Circularity Work

44:56 How Sustainability as a Function will Evolve

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Sorouch: [00:00:00] I think it's important not to look for perfection, but to focus on speed, momentum, and achieving the results we need to drive by 2030. Once we reach those milestones, we can refine and improve further.

Maximilian: Hi everyone, welcome to another episode of The Sustainability Circle Podcast. I’m Max, co-founder of TSC, and your host today. Every two weeks, we bring you insights, success stories, and practical advice from top sustainability leaders driving change in organizations worldwide.

Today, I have the pleasure of speaking with Sorouch Kheradmand, Global Head of Sustainability at Schneider Electric. Sorouch has been instrumental in integrating sustainability into business strategy and turning it into a competitive advantage at Schneider. That’s exactly what we’ll be discussing today—how to move beyond compliance and leverage sustainability as a strategic advantage.

Sorouch, great to have you on the show.

Sorouch: Great to be here, Max.

The Role of Sustainability as a Competitive Advantage

Maximilian: Let’s start by discussing your bold perspective that the role of Chief Sustainability Officers (CSOs) should eventually disappear. Can you explain what you mean by this and why you believe the role needs to evolve?

Sorouch: This idea came from my research and interviews with business leaders. Right now, in most companies, the CSO role is focused on reducing the company’s footprint, ensuring compliance, and meeting climate goals. These are important tasks, but in many cases, sustainability remains siloed from core business strategy.

Sustainability is often seen as a cost center rather than an enabler of growth. But in reality, it can drive efficiency, innovation, and differentiation. My argument is that sustainability should be embedded into every function of a company, rather than relying on a single department. When that happens, the need for a standalone CSO role may diminish because sustainability will have become fully integrated into corporate strategy, R&D, supply chain, and customer solutions.

Making the Business Case for Sustainability

Maximilian: Many sustainability leaders agree that sustainability can be a key driver of competitive advantage. But in practical terms, how can they convince executives to integrate sustainability into corporate strategy?

Sorouch: It all comes down to framing sustainability as a business opportunity rather than a compliance requirement. I use a simple framework to help organizations think about this shift:

• Compliance and risk mitigation – Companies must comply with emerging regulations and manage risks from supply chain disruptions, carbon pricing, and resource scarcity.
• Operational efficiency – Sustainability can lower costs by improving energy efficiency, reducing waste, and optimizing supply chains.
• Revenue growth and competitive differentiation – Companies that integrate sustainability into their products, services, and customer solutions can create new revenue streams and strengthen their market position.

Executives respond to profitability, risk reduction, and growth opportunities—not just ethical arguments. So, sustainability leaders need to speak the language of business and demonstrate how sustainability contributes to top-line revenue and bottom-line efficiency.

How Sustainability Creates Business Value

‍Maximilian: That makes total sense. If sustainability can secure or generate revenue, business leaders will listen. Can you give some examples of how Schneider Electric integrates sustainability into business value creation?

‍Sorouch: Absolutely. Here are two key areas where we’ve embedded sustainability:

• Product innovation – We reengineered a core product using 40% less copper and aluminum, reducing emissions while maintaining performance. This wasn't just a sustainability win—it also lowered production costs and made the product more competitive.
• Circular economy and supply chain resilience – As demand for raw materials like aluminum and copper continues to rise, securing sustainable and recycled materials is becoming a business necessity. Circularity helps us stabilize supply, reduce costs, and differentiate our products in the market.

Sustainability isn’t just about meeting obligations—it’s about creating value, driving innovation, and ensuring long-term resilience.

Shifting Mindsets: Overcoming Challenges in Sustainability Integration

‍Maximilian: Sustainability leaders often struggle to move beyond compliance and into strategic decision-making. What challenges do they face, and how can they overcome them?Sorouch: One of the biggest challenges is the "curse of knowledge." Sustainability experts often use technical language—Scope 3 emissions, ESG taxonomies, lifecycle analysis—that business leaders don’t understand. If we want buy-in, we need to speak the language of executives and focus on clear, tangible business impacts.

Another challenge is that many companies hire deep ESG specialists who lack business strategy experience. This can isolate sustainability from core decision-making. Instead, I believe sustainability leaders should come from commercial, strategy, or product backgrounds—people who understand customers, operations, and financial trade-offs.

Embedding Sustainability into Business Functions

‍Maximilian: So, rather than treating sustainability as a separate function, it should be woven into existing processes. What’s the best way to do that?

‍Sorouch: I’d recommend two approaches:

1. Bottom-up innovation – Encourage teams across R&D, procurement, sales, and manufacturing to embed sustainability into their daily work. When Schneider redesigned our data center equipment to reduce energy consumption, it was driven by our product teams, not a sustainability mandate.
2. Strategic alignment – Sustainability should sit within corporate strategy, not as a separate function. At Schneider, every product innovation must deliver an improvement in sustainability compared to the previous generation.

By making sustainability a core business driver, you shift the conversation from "doing what’s right for the planet" to "doing what’s right for the company, its customers, and its bottom line."

The Future of Sustainability Leadership

‍Maximilian: Looking ahead, how do you see the role of sustainability leaders evolving in the next 5-10 years?

‍Sorouch: I see two major trends:

1. Expanding focus areas – Sustainability leaders will need to go beyond carbon emissions and start integrating biodiversity, water usage, and resource scarcity into business strategy.
2. Shifting from reporting to strategy – Some companies are treating sustainability as a compliance function, which risks siloing it from business value creation. Instead, sustainability should be fully embedded into corporate strategy and decision-making.

In an ideal future, sustainability will be so integrated into business strategy that the CSO role, as we know it today, will no longer be necessary.

Final Thoughts

‍Maximilian: That’s a powerful vision for the future. Thank you, Sorouch, for sharing your insights! This was an incredibly action-packed episode with real, practical takeaways.

‍Sorouch: Thanks, Max. It was great to be here!

‍Maximilian: And to our listeners, thanks for tuning in! See you next time on The Sustainability Circle Podcast.