CFOs seek to bridge gap between finance and sustainability teams

A network of chief financial officers (CFOs) working for several of Europe's biggest corporations have published four guides to help the financing and accounting community incorporate sustainability into their businesses.

The Prince’s Accounting for Sustainability Project (A4S) CFO Leadership Network – whose members include Unilever, Walmart and Burberry – developed the guides with the aim of creating more resilient businesses, ultimately leading to better commercial outcomes.

The four guides are aimed at a finance audience but will also be of interest to sustainability professionals.

John Rogers, CFO of Sainsbury’s and A4S CFO Leadership Network chair, said: “As CFOs we have a crucial role to play in helping our businesses to understand the value of values, and sustainability in particular. It can be a challenge knowing where to start, so these guides are designed to give CFOs practical advice using real case studies of how others have tackled the issues.”

The four guides are: 

– Managing future uncertainty: an introduction to integrating risks resulting from macro sustainability trends into business decision-making

Introduces finance and risk professionals to the potential business impacts from macro sustainability trends (such as climate change, water scarcity, increasing population and severe weather events), and why it is important to adapt traditional risks management process to respond to these trends. READ THE REPORT HERE.

– Natural and social capital accounting: an introduction for finance teams

Helps finance teams increase their understanding of the growing movement around natural and social capital accounting. The guide explores the benefits and challenges of converting natural and social capital impacts and dependencies into financial figures, to gain the attention of decision makers. 

CAPEX: a practical guide to embedding sustainability into capital investment appraisal  

Outlines how businesses can adapt their existing capital investment appraisal to integrate social and environmental issues, and how traditional financial return-based investment decisions can be broadened, to make sustainability issues more explicit and transparent. 

– Enhancing investor engagement: a practical guide for investor relations teams to engage on the drivers of sustainable value

Assists investor relations teams in engaging investors on the link between sustainable business models and the creation of shareholder value. The guide provides overarching principles on communicating with investors and offers insights into CFO Leadership Network member’s experiences of the successes and pitfalls. 

Vital role

The A4S CFO network was launched by the Prince of Wales in 2013 to focus on developing and sharing successful strategies “so that these become the ‘norm’ across all businesses”. Member organisations of the Network include BUPA, Burberry Group, Danone, Marks & Spencer, Sainsbury’s and Unilever. 

“CFOs have a vital role to play in making sure their businesses thrive, not just today, but tomorrow and into the future,” His Royal Highness The Prince of Wales said when it launched: ” The bottom line is that sustainable business equals good business.

“I am therefore delighted that the A4S Chief Financial Officer Leadership Network will play a key role not only in communicating why sustainability makes business sense, but how to start accounting for it.”

Network members have signed up to a Charter that sets out their ambitions and commitments.

Natural capital

Bridging the gap between a business’s finance and sustainability teams is crucial for a transition to a low-carbon, sustainable economy. In November 2014, the Management Consultancies Association (MCA) stressed the importance of presenting the low-carbon agenda as an opportunity for economic growth, rather than just the usual arguments for sustainability. 

CFOs have already been called upon by the Chartered Institute of Management Accountants, EY the International Federation of Accountants and the Natural Capital Coalition to look beyond short-term corporate reporting and start accounting for natural capital in their balance sheets. They warned last year that that natural capital depletion will leave businesses ‘dangerously exposed’ unless they start being more proactive in tackling the issue.

The CFO Leadership Network’s ‘Managing future uncertainty report’ can be downloaded here. 

Lucinda Dann

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