Driving Sustainability as a CFO
November 12th 2021 | Posted by Phil Scott
Driving Sustainability as a CFO
Sustainability is a focus of attention across the world as we attempt to address climate change issues. The simple fact is that if changes are not made, the world will be in serious danger in the not-too-distant future.
World leaders are discussing initiatives to help reduce climate change issues at COP26. Business professionals are also taking action to make a change. Doing so is not only the ethical path to take, but also vital to attracting and retaining the support of investors. Successful CFOs drive sustainability initiatives within a business by aligning the finance function with the transformation goals of the organisation.
Transformation in an organisation
Setting and realising ambitious sustainability goals is a vital aspect of addressing stakeholder demands and mitigating against risk. CFOs, and the finance team as a whole, have a critical role to play and are therefore at the centre of every step towards achieving a holistic sustainability approach.
These steps begin with a base level of understanding and progress towards placing sustainability at the core of the organisation.
Step 1 – Recognising the benefits of sustainability
At this stage of the sustainability journey, an organisation’s leadership team recognises the value of a sustainable approach but there is no overarching strategy in place.
This means the focus is often on short term green projects that provide a quick win. CFOs have the opportunity to widen this narrow focus and progress the organisation to stage 2.
Step 2 – Developing sustainability ambitions
The finance function of an organisation with serious sustainability ambitions leads an analysis of programmes that can be developed in order to realise these ambitions. This analysis serves as the basis for developing frameworks to complete programmes in areas such as generating energy from solar power.
At this point in the journey, forward thinking CFOs source sustainable finance opportunities to enable the funding of further green measures.
Achieving central focus on sustainability in the organisation
At this point in an organisation’s sustainability progress a central focus is reached. Sustainability measures are an integral feature of all areas of work. This requires collaboration across all functions.
This is when the finance team takes a leading role in proceedings, under the leadership of the CFO. They shape the sustainability path of the organisation and ensure valuable financial and decarbonisation returns are a main focus.
At any stage of an organisation’s sustainability progress, CFOs keep track of the way sustainability is integrated with the finance function. This allows the finance function to play a leading role in the realisation of overall sustainability goals.
This helps the business to transform into an ambitious organisation that is successful at developing and maintaining a sustainability focused strategy and plan. This in turn better enables the organisation to structure sustainable investments and manage risks.
At a time when protecting the planet is a central focus in the world, achieving this type of holistic approach is vital to any business.