More and more CFOs responsible for sustainability strategy
50% of CFOs see sustainability as key driver for financial successDOWNLOAD
Diegem, 30 November 2012 - CFOs are increasingly involved in the development of companies' sustainability strategies according to the results of the study “Sustainability: CFOs Come To The Table” recently published by Deloitte. The study surveyed 250 CFOs from 14 countries and provides insight into how sustainability plays an increasingly important role in support of business goals and how CFOs specifically invest in sustainability to gain a competitive advantage. Deloitte’s study indicates that the number of CFOs and COOs who are responsible for sustainability within their company’s management almost doubled over the past year (increase from 20% to 36%).
Sustainability – a key differentiator and opportunity for financial growth
CFOs are playing an increasingly active role in devising their companies’ sustainability strategies. These strategies usually initiate profound changes within the organisation, such as the introduction of more sustainable technologies and environmentally friendly policies.
“Companies realise that sustainability can no longer be seen as an ‘add-on’ or just another initiative under the corporate social responsibility strategy. Sustainability is a key driver for financial growth and greatly affects the future of every company,” says Gert Vanhees, a Partner at Deloitte and Energy & Resources Manager at Deloitte Belgium.
Integration of sustainability in business reporting: not an easy task
Reliable data and analyses are very important to CFOs in order to be able to make informed decisions about their companies’ sustainability strategies. The study shows that most CFOs are disappointed with the reliability and quality of the available sustainability data. However, they do recognise the importance of this information in successfully managing business performance.
Vanhees: “We have noticed there is still room for improvement with regard to our customers’ data collection and reporting. Sustainability data is becoming increasingly important for major investment decisions, for example.”
The majority of the CFOs who participated in the study indicate that the impact of their sustainability problems resurfaces in financial reporting (74%), but also in tax affairs (54%).
More investment in sustainable technology: also on the CFO’s agenda
Reducing the environmental footprint is an important issue for CFOs. They mainly look at ways to reduce the use of scarce resources and more efficient energy management. Although CFOs do not have to become technology experts, a good understanding of so-called Cleantech solutions can provide a real competitive advantage. 26% of CFOs feel that investment in Cleantech solutions is very important.
Vanhees: “CFOs not investing in sustainable technologies risk lagging behind. It is important that they anticipate the risks of shortages and price volatility of certain commodities and energy sources in order to outperform their competitors in a sustainable way when these risks arise.”
Important task for the CFO: shape the finance function in terms of sustainability
The study indicates that employees are more aware of sustainability compared to one year ago. Investments in sustainable development remain crucial, because they have a major impact on the reputation of the company, employee retention, talent attraction, the reduction of the company’s risk profile, innovation, and the pursuit of sustainable growth. In order to reach their companies’ full sustainability potential, CFOs have to reshape the role of the finance function in terms of sustainability.
Vanhees concludes: “This study shows the increasing importance of sustainability with regard to companies’ strategic and operational decisions and the impact on risk management, sustainable business performance and innovative growth. The CFO’s deeper involvement in sustainability issues and the greater reporting responsibilities towards interested investors will lead to more reliable reporting backed up by more relevant sustainability performance indicators in the future.”