Why CFOs Could Hold the Key to Corporate Sustainability

There was a time where organisations were keen to show sustainability leadership, where earning the latest badge or stamp was something to proudly show, and was an important part of a company’s narrative. Doing good for the sake of it was enough of a reason to participate. Over recent times, there has been a clear shift in the importance of this narrative to corporate strategy. While the reasons are in part a reflection of geopolitical shifts in priorities, this speaks to a deeper, underlying point – sustainability needs a business case, not just a feel-good factor. 

Enter the CFO – often the steward of the company business case, and a signatory of the biggest cheques. While values-led sustainability thrived in more prosperous times, today’s climate demands a stronger business rationale, with justification to or from the CFO. It is worth noting that values-led sustainability, while noble, risks the agenda being at the mercy of just that – the values of individual leaders. Or worse – sustainability efforts could be a type of organisational mimicry that is driven by what is fashionable at the time, which can easily be reversed under pressure, and calls into question the worth of the pledges being made in the first place.  

However – we also need to do something. Which begs the question – how do we ensure that we are enabling a sustainability transformation in such a way that the CFO can confidently sign off on the potentially large amounts of investment required to achieve the levels of change needed? 

1. Integration with Corporate Strategy 
   This is the most fundamental piece. Sustainability needs to be built-in to the core of the business strategy, of its value proposition, rather than a bolt-on that is good for marketing and company narrative, but fundamentally is not an intrinsic part of the business. This means aligning and incorporating sustainability with business goals and the underlying operating model, while actively tracking performance against both financial and non-financial targets. Being a successful CFO requires stepping out of the finance silo, and this makes the CFO well placed to take a strategic lens to sustainability.
   
   
2. Driving Value and Growth
   Building on the above, CFOs are essential in shifting sustainability from being purely a risk mitigation and compliance exercise to being a strategic driver of value and growth. By supporting initiatives such as carbon reduction and sustainable supply chains, as well as societal engagement and community outreach, CFOs can help defend the business against market and supply chain risks, while driving long-term growth and preserving the social license to operate.
   
   
3. Governance and Accountability
   CFOs play a critical role in establishing the right governance frameworks that support sustainability initiatives, and ensuring that the company’s financial strategy aligns with its ESG objectives and targets. With only 16% of the largest 2000 companies with emissions data actually on track to reach net zero in their operations by 2050, this becomes increasingly important as reaching these goals becomes a strategic priority. This includes defining clear roles and responsibilities, creating relevant decision-making forums with representation across the business, and embedding sustainability into the organisational and executive structure – both in its own right and across different business and functional units.
   
   
4. Financial and Non-Financial Reporting
   The role of the CFO has expanded in many companies to include non-financial reporting. Whereas before, a CSR report was typically owned by a marketing function, now these are often co-owned by marketing and finance, ensuring that sustainability reports have the same level of rigour and controllership that applies to financial reporting. It is true that recent evolutions in the scopes of EU regulation (namely CSRD / CSDD, or the “Omnibus” package) have resulted in a reduction in the number of companies in scope. However, forward-thinking organisations will be looking to invest in the capability to develop rigorous non-financial reporting from now, both to prepare for the inevitable regulatory pressure, but – more importantly – to enable better strategic decision making for the future of the business.
     
5. Collaboration and Stakeholder Engagement
   Effective sustainability strategies require collaboration across various departments and with external stakeholders. Internally, finance will be continuously assessing priority investments and projects to assess the business case and alignment with strategy, so is well-placed to include sustainability as part of those considerations. Externally, coordinating with investors, board members, suppliers or regulatory bodies also provides opportunity to ensure that sustainability stays on the agenda at strategic meetings and updates. Overall, given the CFO’s typical role of high decision authority and influence, their role in facilitating this collaboration is critical in the development and implementation of sustainability initiatives. 

Considering the above, it is also no surprise that there is an increasing number of Chief Finance and Sustainability Officers, bringing together sustainability executive leadership with finance. While this does risk reinforcing sustainability as purely a compliance and reporting exercise, for those organisations where CFOs are a driver of business strategy, this can elevate sustainability to being a critical part of the conversation. By shifting to a truly business-case driven justification of sustainable business, organisations are more likely to put this at the core of their business strategy and operating model, which gives this a greater chance of driving long-term, sustainable value creation.  

In summary, there is a clear implication for sustainability leaders looking to build consensus in their C-suite – sustainability for its own sake is unlikely to be enough to justify meaningful investment. However, taking a long-term, risk-managed view on the future of your business will never go out of fashion. Having an engaged CFO as either an enthusiastic partner or even owner of this agenda can be an excellent pathway forwards. In today’s boardroom, sustainability needs to earn its place on the balance sheet – and the CFO is the one with the pen. 

The views expressed in this article are solely of the author and do not necessarily represent those of University of Oxford or Accenture.

Cyrus Suntook​​​​​​​ is an Associate Fellow at Saïd Business School, University of Oxford, and the Head Tutor of the Leading Sustainable Corporations Programme. He is also a leader in Accenture’s Strategy practice, focusing on how sustainability and AI are embedded into corporate strategy and operating models.

But we circle back to the challenge of there not being enough accountants to begin with. How do we address that? A greater investment in ongoing education may improve these numbers through higher retention—and the global applicability of certifications and certificates like IMA’s can unlock new talent pools in emerging economies where companies are increasingly looking for talent. However, a more innovative approach involves knocking down entry barriers to allow individuals with diverse backgrounds, credentials, and skills to learn the fundamentals of accounting.

This logic underpins IMA's most recent certification, the FMAA (Financial and Managerial Accounting Associate). It provides the basics of financial and managerial accounting without requiring any prerequisites, addressing the most urgent and basic talent shortages in the field while potentially attracting individuals from fields like technology. The FMAA is not designed to equip anyone with the skills of a lifelong accountant, but it does offer a lifeline for organisations in need of talent at the entry level in the short term, and an alternative pathway to an accounting career in the long run.

Talent and development will remain the most pressing issues facing the accounting and finance profession in the years to come. However, the pessimists don’t have to be right; we can invest in education, upskilling, and recruitment from outside our field to secure the future of the profession.

Main image credit: MR.Cole_Photographer / Getty Images