Environmental, Social, and Governance (ESG) ranks high on the corporate agenda, with investors and wider stakeholders keenly observing organizations' sustainability goals. Moreover, with regulations and stringent disclosures gaining importance, the role of Chief Financial Officers (CFOs) is fast evolving as they are now getting involved with the organizations’ sustainability initiatives.
In the future, the industry will witness a significant shift across the value chain. But in the latest EY India CFO Forum, the question in discussion was, “Are you (CFOs) ready to deal with sustainability?”. The expert panelists agreed that CFOs must be proactive and instrumental while helping the company and executive team define ESG goals for their company and the respective industry. CFOs must be at the forefront of identifying the environmental risks and social impact. They need to enable corporates to mitigate risks and move toward ESG opportunities.
These are busy and exciting times for sustainability, and there is no better time to start improving ESG than now. The majority of the big corporates have become fully aligned with sustainability and technology enablement, while smaller companies are focusing on a clear strategy and ESG opportunities to remain competitive. Organizations, irrespective of their size, have realized that markets are rewarding ESG-focused companies, and two top priorities that have emerged for corporates are ESG from the risk and opportunities perspectives.
The importance of sustainability was further reiterated in the recently released EY 2022 CEO Outlook Survey, where 90% of respondents stated sustainability as the primary driver for competitive advantage, long-term strategic growth, and lowering costs. The challenging pandemic proved to be an adaptability test for almost all sectors. It pushed corporates to embrace innovative ideas for decision-making processes as circularity, innovative materials, and cutting-edge technologies became the order of the day, inspiring CFOs to assume a greater responsibility toward ESG.
Sharing his insights on how CFOs view ESG, Jugeshinder ‘Robbie’ Singh, Group CFO, Adani, said,