This piece was published as a side-bar to the article in the October issue of Accountancy Ireland. The article, "A decade to deliver: CFOs’ ESG considerations, Oct 04, 2021" was written by Ambrose Shannon, a Managing Director at Accenture and CFO and Enterprise Value Lead for Ireland and the UK. It explains how CFOs can play a lead role in limiting the future impacts of climate change during what he describes as “the decade of action”.
There is increasing evidence that strong ESG (environmental, social and governance) credentials can boost a company’s bottom line while also generating access to capital. Investors, clients and employees alike are seeking out companies with credible ESG profiles.
There are many reasons why it makes sense for CFOs to take on the task of aligning financial and ESG goals. CFOs work in a variety of organisations. What unites them is that they are all trusted advisors and are core to both daily operations and long-term strategies. They recognise risks and opportunities and act on them. They are involved in critical decision-making and provide reliable information to investors and boards. They advise and influence action in others and are uniquely placed to be a positive force in driving change.
What distinguishes CFOs from other financial advisors is their potential to influence and encourage greener choices at an executive level within their organisation. They have the authority to advise on procurement policies and procedures that focus on sustainability as much as cost control. CFOs also have a key role in the preparation of annual reports and in deciding on what they include.
Measuring sustainability-related activities and reporting on them is an integral part of becoming a sustainable business. Choosing from among the many frameworks and standards is an example of the leadership a CFO can offer, particularly in the absence of standardised and comparable frameworks.
Business models are moving away from placing shareholder value at the centre. Instead, broader sustainable measures are being embraced, and the CFO will play a critical role in this process.
Susan Rossney is Public Policy Officer at Chartered Accountants Ireland.
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