Fitting Sustainability into the CFO's Job Description

Fitting Sustainability into the CFO's Job Description

Making sustainability a core aspect of business creates more, and new, work for employees. In the case of chief financial officers (CFOs), it not only leads to new responsibilities, but also offers CFOs the chance to bring their expertise and experience to sustainability.

As investors demand more details of sustainability efforts and companies are expected to understand and talk about climate change-related risks they face, CFOs need to have solid knowledge of all aspects of their companies' sustainability programs, Ernst & Young say in a report on the changing role of CFOs.

Not only should CFOs know what their companies are up to, but they also need to understand broader sustainability issues and trends, and anticipate what investors and others will be asking about.

Heightened interest from investors and the mainstreaming of sustainability reporting are just a couple of key trends for CFOs to follow, noted senior contributor Paul Baier recently. 

CFOs also play a major role in sustainability-related efforts since they're looking at the costs and savings associated with new purchasing decisions, projects, renovations, investments and more. Moving forward, CFOs also need to assess new acquisitions and major capital projects for financial risks from regulations that apply to them or possibilities like carbon caps.

While those duties add onto the job responsibilities of CFOs, Ernst & Young also point out that CFOs can bring something to the table as well. CFOs can use their experience with third-party assurance to help chose providers of the service, and they can also help corporate sustainability teams work effectively with auditors.

Adding new work also adds new challenges, particularly related to transparency and consistency. CFOs need to make sure that any sustainability-related risks or information that is being reported gets reported consistently, Ernst & Young says, noting that a company could disclose climate change risks they face in a Climate Disclosure Project report but fail to report that same information in regulatory filings.

This is all somewhat predicated on the idea that CFOs are already on board with sustainability, but for those who aren't yet convinced of its benefits, direct them over to these five ways sustainability pays off, as relayed by UPS's CFO.

Image CC-licensed by ken teegardin.