Should CFOs Take A Seat At The Sustainability Table?
More than half of finance executives believe their companies are “very likely” or “somewhat likely” to increase revenue, reduce operating costs, improve investor returns and shareholder value, and improve employee retention through sustainability, according to a survey conducted by CFO Research for Jones Lang LaSalle.
But most finance executives acknowledged that their own role in driving sustainability was limited.
The greatest barriers to incorporating sustainability into financial strategy include the inability to measure the effects of sustainability on shareholder value (ranked among the top three challenges by 46% of respondents), inability to document the effects on financial performance (37%), and a lack of standard decision-making frameworks that consider environmental factors (36%).
But that could soon change. The Global Reporting Initiative’s creation of an extensible business reporting language taxonomy for the many indicators itemized in its sustainability framework, could automate sustainability reporting in much the same way that the SEC believes XBRL will aid the production of financial reports.
As reports encompass more data, CFOs, who are better qualified to verify whether data is accurate and up-to-date, might take the lead in sustainability reporting.
We’re already seeing a move to roll sustainability reporting into annual reports (BASF made a big deal when it combined its reports earlier this month).
David Phillips, senior corporate reporting leader at PwC agrees with the general direction. “It is mainstream and the responsibility of the CFO and CEO,” he said in an article last year.
The Prince of Wales’ Accounting for Sustainability project released a report that focused on how to “embed” sustainability considerations into general corporate thinking, but also on how to report these efforts.
Other findings of the report:
- The most often cited benefits of a move towards sustainability were reduced risk (“very” or “somewhat” likely to produce benefits at 78% of companies), enhanced brand and reputation (77%), customer retention (72%), and improved employee health and productivity (68%).
- The highest priority objectives in corporate sustainability are regulatory compliance (ranked as a high priority for 61% and a mid-level priority for 26% of respondents), improving energy efficiency and reducing greenhouse gas emissions (a high priority for 47%, mid-level for 32%), and reducing the environmental impact of operations (45% and 32%).
The study surveyed 175 corporate CFOs and senior finance executive.
Stay Up-to-Date On Environmental Management, Energy & Sustainability News with EL's Free Daily Newsletter
Energy Manager News
- Passive-House High-Rise to be Airtight
- Greensmith Offers ‘Second Opinion’ on Energy Storage Systems
- Commercial Tankless Water Heater Handles the Demands of Business
- Booz Allen, Siemens, Power Analytics Score 16 Microgrid Projects
- NH City to Save $500,000 Annually with LED Streetlights
- Australian College Uses Energy Storage
- LED Boosts Light Output 50%, Uses Existing Drivers
- Energesco Wins Energy Efficiency Contracts for Multifamily Buildings in Maryland