Future skills now: How finance can help align sustainability goals

content sustainability cfo green finance

A PwC report published in March 2023, How CFOs further value creation by leading on sustainability, opens with the bold statement: ‘Once again, the CFO’s job description is being rewritten.’ It goes on to argue that CFO leadership of sustainability initiatives is crucial for long-term value creation, as well as for environmental, social, and governance (ESG) objectives.

It continues: ‘Many CFOs are already fielding questions from investors, and most companies can expect to face a barrage of reporting and compliance requirements in the coming years. Here is where they can build trust among stakeholders, when supported by the finance function, with its well-established ability to manage information. In addition, finance has a host of tools – for forecasting, budgeting, allocation, and score-carding, to name a few – that it can use to bring sustainability factors into every business process and every decision about value creation.’

It goes without saying that while CFOs might be the most high-profile employees to champion and help bolster sustainability credentials, everyone in the finance food chain must also get on board and can also help to add value.

In an era of heightened awareness about climate change and social responsibility, companies across the globe are embracing sustainability initiatives to align their operations with the principles of environmental stewardship and social impact. While the responsibility for implementing and managing these initiatives often falls on dedicated sustainability teams, accountants and finance professionals have a crucial role to play in driving and aligning these efforts throughout the organisation. By using their financial expertise, data analysis skills and strategic mindset, they can help companies navigate the complex terrain of sustainability and create a positive impact on both the planet and the bottom line.

Integrating sustainability metrics into financial reporting

One of the fundamental ways accountants and finance professionals can support sustainability initiatives is by integrating sustainability metrics into financial reporting. By working closely with sustainability teams, they can identify key performance indicators (KPIs) that accurately measure the environmental and social impact of the company’s activities. These metrics, such as carbon emissions, energy consumption and waste reduction can then be incorporated into financial reports, providing stakeholders with a comprehensive view of the company’s sustainable practices and progress.

Initiating a sustainability budget

Accountants and finance professionals can assist in the development and management of a dedicated sustainability budget. By collaborating with sustainability teams, they can analyse the financial implications of sustainability projects, forecast the costs and benefits, and help prioritise investments in initiatives that align with the company’s long-term sustainability goals. Furthermore, by tracking the financial performance of these initiatives, accountants can demonstrate the return on investment (ROI) of sustainability efforts, providing valuable insights to support future decision-making.

Search hundreds of roles from all over the world on ACCA Careers

Sign up for a job alert tailored to your desired location and role

Incorporating ESG factors into investment decisions

As companies face increasing scrutiny from all stakeholders, including investors and consumers regarding their ESG practices, accountants and finance professionals can contribute to the integration of ESG factors into investment decisions. By conducting thorough ESG assessments and analysing the risks and opportunities associated with sustainable investments, finance professionals can provide valuable insights to support informed decision-making. This ensures that the company’s financial resources are allocated to initiatives that align with its sustainability objectives and have the potential for long-term value creation.

Saving money through sustainable practices

Sustainability initiatives often go hand in hand with cost savings. Accountants and finance professionals can play a crucial role in identifying and quantifying the financial benefits of sustainable practices. This could include energy efficiency measures, waste reduction strategies or supply chain optimisations. By conducting rigorous cost-benefit analyses and identifying opportunities for operational efficiency, finance professionals can help companies reduce costs while simultaneously reducing their environmental footprint.

Effectively communicating green goals

Transparent reporting and effective communication are essential for building trust with stakeholders. Accountants and finance professionals can ensure that sustainability initiatives are accurately communicated to internal and external stakeholders through clear and concise reporting. By providing transparent information on the financial implications, risks and benefits of sustainability efforts, they contribute to building a positive reputation and attracting investors and customers who prioritise sustainable business practices.

By integrating sustainability metrics into financial reporting, establishing dedicated budgets, considering ESG factors in investment decisions, identifying cost savings and enhancing stakeholder communication, finance professionals can help companies achieve their sustainability goals while simultaneously creating long-term value.

More information

This article was first published in Student Accountant in June 2023Get the SA app now

Back to listing