Finance for a sustainable future Reimagining reporting

if your organization has one, that is. Your CSO likely has one major mandate: to build a clear strategic vision for sustainability across the organization. As a finance leader, your job is to figure out how reporting can support that vision and how finance can help achieve it. A CSO may not know the questions to ask or appreciate all that goes into reporting and disclosures. A finance leader can help guide those conversations.

The value case for sustainability reporting may be clear to you and your CSO, but you both will need significant buy-in from leadership (both at a corporate and business unit level) to realize that value through technology and data investments. Working alongside your organization’s IT and data operations can help future-proof those investments by avoiding the creation of solutions and support capabilities that don’t scale.

Finance leaders should emphasize the importance of sustainability and why finance should understand it and get it right. Get buy-in from your team, and see to it that each member sees the multiple ways sustainability efforts will manifest across business units—and how finance can track each effort.

Seasoned finance professionals may remember the many changes made across organizations from scratch to comply with the Sarbanes-Oxley (SOX) Act of 2002, which imposed greater disclosure and control requirements. SOX compliance is complex—and it can serve as a blueprint for the growing requirements of sustainability disclosures and reporting. Finance can adapt the SOX principles and programs that have already proved effective for their organizations. Remember, too, that many of these regulations, voluntary or not, are global, such as the Global Reporting Initiative.

Consumers have expressed concerns over the validity and accuracy of reported sustainability data. Because finance is grounded in the disciplines of risk, controls, and assurance, it is uniquely positioned to solve for this, drive trust, and unlock added business value. Higher standards for reported sustainability information are clearly on the horizon; who better than finance to shepherd the extended enterprise through that journey? Imagine how trusted sustainability information could sway new and existing customers as they look to do business with those they have shared values with and the significant role finance can play.

Rules and regulations are already becoming more prolific around the world, a trend that appears likely to continue. More than 1,800 climate laws and policies have been enacted by governments worldwide, and the Paris Agreement currently has 197 signatories,¹ not to mention new regulations such as the European Union Taxonomy, Taskforce for Climate-related Financial Disclosures, and Corporate Sustainability Reporting Directive. Even though policy efforts in the United States are in progress, organizations that want to remain globally competitive should operate within the bounds of a complex and growing global regulatory landscape. An empowered finance function can help clarify the reporting impacts domestically and globally.