The CFO's role in sustainability: E&Y lays out five keys
Traditionally, CFOs ran the numbers and let others get on with the soft stuff, worrying about the environment or social performance. No longer, according to How Sustainability has Expanded the CFO's Role, a new report from consultant Ernst & Young. The job silos are crumbling, and the CFO's job scope just widened.
Fronesys feels there's some good material in the report for every CFO to consider in terms of their own performance, but here are five keys that stand out:
- Actively pursue a sustainability reporting strategy, setting in place the means to measure, manage and report on your sustainability performance.
- Integrate sustainability into the operational side of the business - unless this happens, the company's sustainability posture will be just that: words without deeds.
- Enhance dialogue with shreholders and stakeholders, and improve disclosure in key sustainability areas. A recent Harvard study found that enhanced disclosure in environmental and social metrics made a bigger difference than enhanced governance disclosures.
- Ensure the directors know what they they are doing and have the right skills in sustainability issues, particularly when it comes to risk management,
- Consider using non-traditional performance metrics, such as tying compensation to non-financial risks, to ensure that sustainability strategies connect to real-world performance.
Check out the full report here.