The Finance World is Starting to Take Notice of Sustainability

And that can only mean one thing; they are starting to see the cost savings that can be realised from sustainability initiatives.

A few years ago, sustainability was widely seen as a nice-to-have by CFOs. It was a warm and fuzzy initiative driven by corporate social responsibility (CSR) that fulfilled an organisation’s moral obligations, but didn’t deliver any ‘real’ value.

However, in recent years investors have begun to demand visibility over sustainability performance which has led to increased tracking of corporate environmental data. Better accessibility to data has led to more objective decision making and is providing the black and white proof CFOs need to recognise the value of sustainability initiatives.

In fact, a recent Harvard Business Review blog highlighted that resource efficient companies - those that use less energy and water and create less waste in generating a unit of revenue - actually tend to produce higher investment returns than their less resource-efficient rivals. Boeing, BMW, UPS, and L'Oreal were all named as examples of highly resource efficient in their respective industries.

The more cost savings CFOs see over time, the more hands on they’re becoming in their organisation’s sustainability initiatives. A Deloitte survey of 250 CFOs in 14 countries found that two-thirds of CFOs are involved in their company’s sustainability strategies. More than half of those surveyed say their involvement has grown in the past year.

I’m sure most CFOs are attracted by the quick wins delivered by Environment Managers uncovering the ‘low hanging fruit’. For long-term gain these quick wins should be reinvested back into the sustainability program, creating a framework for continuous improvement that will deliver business outcomes on an ongoing basis. With the easy wins done, this relies on a solid information system with robust data that can be accessed and understood by the business stakeholders.

With CFOs recognising that good environmental performance is not a cost but a business improvement process, the business case for sustainability has never been more compelling.

Simon McCabe is our resident Green Crusader and the Business Relations Director for Intelligent Pathways. Read his bio here.

Back to news