CFOs are getting involved in ways that would have been hard to imagine even a few years ago.
Historically, CFOs were not deeply or directly engaged in sustainability efforts, viewing them as too soft or not in their purview.
But that is changing.
Our report focused on three key areas where CFOs are playing an increasing role:
- Investor relations
- External reporting and assurance
- Operational controllership and financial risk management
In our survey, 65 percent of respondents stated their CFO has become involved in sustainability. Respondents cited cost reductions (74%) and managing risks (61%) as two of the three key drivers of their company’s sustainability agenda — both of which are of keen interest to CFOs.
One key reason for growing CFO involvement is the growing scrutiny of company sustainability issues by equity analysts.
80 percent said new revenue opportunities will be driving sustainability initiatives. And 66 percent have seen an increase in inquiries about sustainability-related issues in the past 12 months from investors and shareholders.
This is a relatively new trend, facilitated in part by the growing presence of sustainability data readily available on analysts’ computer terminals from the traditional financial reporting services. Already, 38% of respondents believe equity analysts who cover their company consider sustainability performance in their evaluations, and 23% believe this will happen within five years.
How would you characterize your CFO’s involvement with your sustainability efforts?
Another emerging trend in business will further engage CFOs in sustainability: the growth of integrated corporate reports, in which sustainability data is reported alongside traditional financial reporting data.
Already, a handful of companies have created integrated reports, and a Europe-based group, the International Integrated Reporting Committee (IIRC) is actively promoting the idea. It is supported by the Prince of Wales’ Accounting for Sustainability Project, the Global Reporting Initiative, the American Institute of Certified Public Accountants and other groups.
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