The need for CFOs to get actively involved in creating sustainable strategies is greater than ever before. In the United States alone, the total spend on sustainable business programs by companies with revenues of over $1 billion is believed to have crossed $60 billion last year. At least 75% of these businesses believe that it is also important to communicate this investment and the significance of sustainability to stakeholders. Besides, as CFO, you are also responsible for assessing resultant risks to compliance, enterprise and assets. If you can successfully define these risks, you may harness them to get maximum returns and avert those that can unduly deplete your resources.
Almost 60% of CFOs in America are already involved in some capacity or the other in the creation, execution and management of strategies related to sustainability. To leverage them, consider the following:
- Incorporate sustainability in day-to-day functioning in areas such as internal control, compliance, tax incentives and performance measurement and reporting of financial as well as non-financial indicators.
- Remember that an increasing number of lending institutions are pledging against financing projects that harm the environment. Besides, aware customers and employees are making decisions on whether or not to interact with businesses based on their sustainability agenda. Also make your M&A moves keeping your goal of sustainability in mind.
- Energy prices are fluctuating like never before. Consider their impact on your books of accounts.
- To deal with emerging issues in this field requires specialized knowledge and training. Recruit and train staff members who can not only perform well in finance but also support the business’ overall sustainability program.
To successfully integrate sustainability into your finance agenda:
- Harness various data sources, including your MIS and reports, to ensure that the data you are receiving about sustainability can be accurately analyzed to deliver useful insights that can, in turn, help you make sound decisions.
- Gain fair understanding about clean technology solutions available to resolve resource issues. It could well become your next big investment – one that yields long-term rewards.
- Currently, employees are gung-ho about the obvious benefits of sustainability. Communicate with them often and keep them updated. If your workforce embraces your sustainability agenda, it will be much easier to implement.
Insight into all the relevant information about the business, its transactions and balance sheet puts you in the best position to shape and implement finance functions related to sustainability. It would serve you well to remember that although your responsibility as CFO is towards your enterprise; your duty as citizen and trustee is towards the environment. The challenge lies in making positive environmental impact an economically viable solution.