How sustainability has expanded the CFO's role

Sep 20, 2011 10:00 AM ET

How sustainability has expanded the CFO's role

As companies continue to recognize the benefits of sustainable business practices, they will begin to develop the tools needed to evaluate and measure their sustainability efforts.

As they do, their finance functions will become more deeply involved in decisions surrounding sustainability initiatives. The changing landscape means that sustainability, and the accounting related to it, have begun to resemble a new business function being rolled out to the overall accounting organization.

CFOs need the support of others, such as the CEO, legal counsel, and the heads of environmental, safety, IR, corporate responsibility and other functions. But CFOs are uniquely able to influence the organization, and to build a consensus toward action:

1 Actively pursue a sustainability and reporting program.
2 Ensure that those responsible for sustainability matters do not operate in isolation from the rest of the enterprise — especially the finance function.
3 Enhance dialogue with shareholders and improve disclosure in key areas, particularly those related to social and environmental issues.
4 Ensure that directors' skills are relevant to the chief areas of stakeholder concern, including risk management tied to social and environmental matters.
5 Consider using nontraditional performance metrics, including those related to environmental/sustainability issues.

Read the full report here:$FILE/CFOSustain.pdf