January 2014

CFO Sustainability Role: The Role of the CFO in Driving Sustainability Success

Posted in Implementation and Integration

The CFO sustainability role is critical for business success. The unique perspectives, skills, tools and roles of the CFO empower them to advance corporate sustainability in the rapidly changing marketplace. The CFO sustainability role is on the rise: In 2012, 26 percent of CFOs from large companies indicated they had sustainability authority, up from 17 percent a year earlier.

What is driving this CFO sustainability role?

CFOs realize that a sustainability lens can improve enterprise risk management. They anticipate revenue generation opportunities from new business lines, new markets and new product features. They respond to investors, lenders, insurers, raters and customers who seek sustainability performance data. They foresee pending government regulations and embrace innovation as a means to go beyond value protection to value creation.

To realize these benefits CFOS will need to embed sustainability in their mandates. Fully embedded, sustainability will become a factor in corporate and financial strategy, financial and operating performance management, and risk and opportunity management. Finance teams will include sustainability factors in budgeting, business casing and investment decisions. Mergers and acquisitions, divestitures and capital expenditures will be analyzed from a sustainability perspective. Tax planners will include sustainability in identifying tax liabilities, and incentives and procurement managers will anticipate sustainability constraints and opportunities in supply chains. Finance will be responsible for the management, reporting and assuring of sustainability information, which will become incorporated into corporate decision-making, incentive compensation and investor relations.

This article summarizes the many ways in which the CFO Sustainability Role can be enhanced.

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