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Many CFOs Lack Involvement in Sustainability Strategy

Some 31 percent of chief financial officers say they are rarely involved or not at all involved in sustainability strategy and governance at their companies, according to a survey conducted by Deloitte.

This hands off attitude is evident despite a majority of CFOs saying they are aware that sustainability will affect their “mainstream” duties, according to “Sustainable Finance: The risks and opportunities that (some) CFOs are overlooking.”

At the tactical level, however, many CFOs are meaningfully engaged with sustainability, Deloitte says. More than 70 percent of those surveyed expect sustainability to have an impact on compliance and risk management, and more than 60 percent foresee changes to functions like financial auditing and reporting.

Yet when it comes to sustainability as part of the overall business strategy, Deloitte says there are still blind spots. For instance, according to the survey, only 29 percent of CFOs believe that merger and acquisitions activities would be affected by sustainability.

The survey was conducted among 208 CFOs of large companies in 10 countries during the first half of calendar 2011.

According to an Ernst & Young report released in August, sustainability is increasingly falling under the jurisdiction of CFOs.

The report says that while sustainability issues have traditionally fallen outside the remit of the chief financial officer, job silos are crumbling as investors, customers and other stakeholders increasingly evaluate companies on their environmental, social and economic “triple bottom line.”

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3 thoughts on “Many CFOs Lack Involvement in Sustainability Strategy

  1. The most successful, strategic sustainability projects that I’ve been part of have been led by CFO’s and not only because of the financial payoffs but because of what embedded sustainability can do to spark innovation (in products and services); growth (in new markets) and engagement of the workforce (to advance lean, take costs out of the business, and provide a heightened sense of purpose and motivation). Take Jenniffer Deckard at Fairmount Minerals–the CFO at the time. Her leadership of the total system’s sustainability strategy not only had huge payoff in terms of leveraging new sources of value (lowering risks, harvesting increases in energy productivity, innovating new products, opening new markets, advancing the brand, and even creating game changers in the mining industry) but also led to her career advancement–she is now President of the company. Here is a video where the CFO kicked of a 300 person strategic planning session launching the sustainable value work using the Appreciative Inquiry Summit method. Its not a typical conference–just speakers etc. Nor is it just for dialogue and networking. Its a 300 person stakeholder joint design session building rapid prototypes–real projects. Here is the video link: http://www.fairmountminerals.com/ The company’s growth rates have been phenomenal. Chuck Fowler the CEO is now talking all over the world sharing everything that they have learned–at the UN, with cities like cleveland helping them “become a green city on a blue lake”. Obviously we need more examples of this kind.

  2. Our CFO is the closest thing we have to a chief sustainability officer, basically sets goals, monitors and drives executives to deliver. It makes a huge difference. No one can ignore a program driven by the CFO.

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