The CFO and the CSO: 6 areas for a lasting friendship
<p>Tips on how to get the CFO and CSO speaking the same language -- and achieving mutually beneficial outcomes.</p>
Note: This blog is the fourth in a series on organizational structure and sustainability from the perspective of BSR’s COO. The first focused on the role and placement of the CSO in an organization. The second covered strategy and the integration of sustainability into the business model, and the third examined how to establish a common organizational language for successful sustainability outcomes.
The CFO is the great reality check on corporate initiatives capable of reducing grand intentions to sobering data. That's also why she can be a CSO or CSR leader’s best friend. Here are six priority areas that can form the basis for a lasting friendship.
As BSR’s CFO, Dan Luscher understands the business priorities of a broad range of companies and industries. He believes that beyond the dense words and pretty pictures, every business plan or annual report addresses a set of core issues that each company must face.
"The more CSR programs support these issues, the more concrete support they’ll likely receive from the CFO,” Luscher says.
Below is a high-level summary of these priority areas with suggestions which enables the CFO and the sustainability team to speak the same language and achieve mutually beneficial results.
- Business Model: CSR can directly support the business model through product or process innovation, as well as by promoting supply chain improvements that are also sustainable.
- Markets: CSR practices can directly influence and build the customer base, such as a product recycling program to drive new customers or community outreach to support brand awareness.
- Teams: There is a proven correlation between CSR and top talent attraction and retention, as well as between healthy labor, happy labor and productivity.
- Resources: Fundamentally, CSR is about the forward planning of business-critical resources and stakeholder relationships -- regardless of whether the focus is on raw materials or people. For example, structural changes in the supply chain can help secure critical resources at reasonable cost for the long term.
- Risk: Risk management is an increasingly sophisticated area of business. Sustainable practices can directly contribute to the mitigation of medium and long-term risks from sustainable sourcing of production and raw materials to the siting of future investments.
- Revenue and Profit: CSR directly contributes to the bottom line (in addition to the triple bottom line of profit, people and the planet) by using sustainable practices to lower energy costs, improve production, build a customer base, and contribute to a range of other initiatives.
In each case, you’ll notice a pattern in line with these suggestions. Sustainability is not the driver: good business is. Of course, broader questions of corporate responsibility and ethics should be integrated into every business decision.
When sustainable practices are clearly aligned with business imperatives, the more likely it is that the practices themselves will be sustained by the business, even when times get tough.
The more CSOs can address and measure sustainability, the greater the chance that the CFO will support sustainability efforts. This leads to the next gateway to the CFO’s heart: the KPI, which will be covered in the next blog.