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Question to CFOs: do you feel equipped to report on ESG performance?
The way a company performs on ESG issues has become critical as more investors demand ESG reports. CFOs are not just financial leaders. When it comes to translation of financial results, metrics and KPIs, they have the best perspective for reporting to investors.
Published: June 6, 2022 By CSE research team
CFOs have a key role to ensure that sustainability ESG metrics available to internal and external stakeholders are aligned and accurate, as well as to support the implementation of the Sustainability ESG strategy.
Keeping up with the changing regulatory landscape is not an easy task. However, when it comes to numbers, CFOs and the finance team are acting as the “reporting gatekeepers”. This key role provides them with a huge opportunity to become ESG leaders. No wonder why 68% of CFOs globally take responsibility for their organization’s ESG performance.
Here are five reasons to understand why the role of CFO becomes increasingly critical as ESG issues gain prominence:
ESG and finance are interconnected
CFOs with in-depth knowledge of sustainability strategies can be critical to retain the balance between financial and sustainability measurements. They have the skills needed to track an organization’s non-financial metrics and link them to financial information.
Sustainability metrics impact finance KPIs
Every CFO should be able to understand how to measure and report on ESG, because such metrics can provide business opportunities, attract investors and offer a competitive advantage. They can also drive better capital allocation by bringing ESG into decision making process. Boards need to be ESG-ready.
Risk management falls under finance’s oversight
Risk management and cost optimization are skillsets found in finance team and CFOs have the ability to incorporate sustainability into enterprise risk assessments. ESG should be a part of an organization’s overall enterprise risk management strategy, by being monitored, mitigated and addressed.
CFOs have a key role in managing reporting frameworks
A variety of different reporting frameworks exist, ranging from basic mandatory reporting to wide-ranging frameworks such the Sustainability Accounting Standards Board (SASB), which maps 77 industry-specific metrics. CFOs are in the best position to determine which measurements are the most useful for evaluating and reporting their company’s ESG performance.
The SEC rules
The US Securities and Exchange Commission’s rules for climate disclosure could provide new opportunities for CFOs and other finance chiefs to view use the new rules to sharpen their organization’s climate strategy and drive decarbonization. And there’s good reason to estimate that the SEC rules will support the current momentum toward an international climate disclosure standard.
How well-equipped CFOs and their teams are will define organization’s financial and sustainability performance. The time has come for companies to pressure test their decarbonization outcomes. CFOs will be setting the climate agenda, measuring and monetizing the decarbonization journey of their firms.
Upcoming programs
In order to prepare your organization for the increased scrutiny on environmental, social and governance (ESG) metrics, CFOs need to redefine their strategic role. Acquire all the necessary tools to develop ESG vision and strategy with CSE’s flagship training program, the Certified Sustainability (ESG) Practitioner Program. Upcoming programs include Leadership Edition on Jun 9, 10 & 13 and Advanced Edition on Sept 22, 23 & 26.
Go for CSE’s certification package program and enroll in both CSE’s leading programs
Get the chance to join the official GRI Certified Standards Training Course –Become Certified with the NEW GRI Universal Standards, June 22, 23 & 27, 2022 (Digital Version) to enhance knowledge, expertise and skills, improve the quality of your organization’s sustainability report, manage effectively the reporting process and acquire the professional certification issued directly by GRI, the world’s leading standard setter for sustainability disclosure.
For Early Bird, Group Discounts and in-house training opportunities reach us at [email protected]
