Chief financial officers, with their role continuously evolving, are expected to champion sustainability initiatives, integrating ESG factors into their financial planning and reporting processes.
Finance leaders now are faced with the task of identifying and mitigating ESG-related risks, allocating resources towards sustainability initiatives and communicating the organisation's ESG performance to stakeholders.
Benjamin Soh, founder and managing director at Singapore-based ESG data and technology company ESGpedia, believes finance leaders are well-positioned to drive both sustainable growth and cost efficiency, given their oversight of financial strategy, risk management, and capital allocation.
Traditionally focused on cost control and profitability, Soh thinks the CFO role has evolved as ESG considerations become central to business resilience, investments and long-term value creation.
Sustainable growth in 2025
For Soh, sustainable growth is not a new initiative in 2025, as it has been a key priority for businesses over the past decade, with increasing momentum in recent years.
"The evolving regulatory landscape, heightened investor scrutiny, and rising consumer expectations have collectively driven companies to embed sustainability into their core strategies," Soh highlights. "This shift is evident across industries, from financial services integrating ESG factors into investment decisions to manufacturing and supply chains adopting greener practices."
He says businesses are not just pursuing sustainability for compliance purposes but also for long-term value creation.
"The convergence of global sustainability standards, such as the ISSB and GRI, has encouraged companies to take a more structured and data-driven approach to ESG reporting and impact measurement."
In addition, Soh recounts that the increasing availability of green financing and sustainability-linked financial products has incentivised companies to transition toward more sustainable business models.
"One of the most persistent misconceptions about sustainability is that it comes at a high cost," Soh notes. "In reality, sustainable growth and cost efficiency are closely interconnected."
He explains that companies that invest in sustainability initiatives, whether through energy-efficient operations, waste reduction, or responsible sourcing, often realise significant cost savings in the long run.
"For example, green-certified buildings reduce energy consumption, leading to lower operational expenses. Similarly, businesses that optimise supply chains for sustainability often achieve greater resource efficiency and resilience against regulatory risks."
Moreover, Soh thinks technology plays a pivotal role in making sustainability efforts both cost-effective and scalable, with digital platforms like ESGpedia enabling businesses to streamline their ESG data management, automate carbon accounting, and access real-time insights for decision-making.
Access to sustainable finance also helps businesses offset upfront costs associated with green investments.
"Green bonds, sustainability-linked loans, and incentive programs offered by financial institutions are increasingly aligned with ESG performance metrics, allowing companies to fund their sustainability initiatives without compromising financial viability," Soh says.
CFOs and sustainability
Considering that CFOs are well-positioned in driving sustainable growth and cost-efficiency for their organisations, Soh says the most effective among them are not just financial stewards but strategic leaders who align sustainability with financial performance.
"What qualifies them to lead these efforts is the ability to balance short-term financial imperatives with long-term investment in sustainable initiatives," Soh explains. "They identify cost efficiencies in operations, assess financial risks associated with climate change
and regulatory compliance, and secure sustainable financing."
Importantly, as Soh stresses, CFOs ensure that ESG initiatives are not seen as cost burdens but as opportunities for value creation, whether through operational efficiencies, enhanced brand reputation, or access to green financing.
Data-driven decision-making is another key strength, with the increasing demand for accurate ESG reporting and disclosures, finance leaders are well-placed to implement systems that track sustainability performance alongside financial metrics.
Benjamin Soh, founder and managing director, ESGpedia
"By leveraging digital tools and data analytics, finance leaders can provide transparency on how sustainability efforts can translate into financial outcomes, helping stakeholders, from investors to regulators, to understand the tangible impact of ESG strategies."
ESG trends in Asia
Southeast Asia is entering a critical phase in its ESG journey, according to Soh, with increasing regulatory developments, rising investor expectations, and growing pressure for businesses to integrate sustainability into their core strategies.
"One major shift is the acceleration of mandatory sustainability reporting, with countries like Singapore, Malaysia, and Thailand aligning with global disclosure standards such as ISSB, GRI, and TCFD, making ESG reporting a regulatory requirement rather than an option."
Soh says this will drive businesses to adopt more structured, data-driven approaches to sustainability, impacting how financial teams track and report ESG performance to ensure compliance, while also leveraging this data for strategic decision-making.
"Sustainable finance is also gaining momentum, as governments and financial institutions are expanding green and sustainability-linked financing options, with businesses increasingly seeking capital that aligns with their ESG goals."
He believes CFOs will play a crucial role in structuring these financial instruments, ensuring their organisations meet sustainability-linked targets to access preferential rates and incentives, as this shift will require a deeper understanding of ESG metrics and how they influence the cost of capital, risk management, and investment decisions.
"Another trend is the growing focus on supply chain transparency and Scope 3 emissions reporting," Soh points out. "As multinational corporations and regulators push for more accountability across value chains, businesses in Southeast Asia will need to track and disclose emissions and sustainability efforts beyond their own operations."
This presents both a challenge and an opportunity for finance teams to enhance ESG data management, integrate digital reporting tools, and engage suppliers in sustainability initiatives.
Looking ahead, Soh believes the finance function will need to evolve from being a gatekeeper of compliance to a driver of sustainable transformation.
As ESG data becomes a fundamental part of financial decision-making, finance teams will need to develop new competencies in sustainability risk assessment, impact measurement, and ESG-driven capital allocation.
"ESG disclosures will no longer be a static, retrospective exercise but a dynamic tool that enables finance leaders to anticipate risks, optimise resources, and drive competitive advantage."
Soh thinks that those who proactively embrace this shift will not only future-proof their organisations against regulatory and market pressures but also unlock new opportunities for growth and innovation in Southeast Asia’s rapidly changing ESG landscape.
Integrating new initiatives
As CFOs are expected to integrate new initiatives like ESG and sustainability while driving positive sustainable growth and improving cost efficiency, Soh says this requires a strategic and data-driven approach, and CFOs can achieve this by embedding sustainability into capital allocation, leveraging sustainable finance, utilising technology for ESG tracking, and fostering cross-functional collaboration.
"A key priority is aligning investment decisions with long-term cost efficiencies. Prioritising energy-efficient infrastructure, waste reduction initiatives, and responsible supply chain practices not only supports sustainability goals but also delivers measurable financial benefits."
He cites investing in green-certified buildings and renewable energy sources as example, saying this leads to lower operational costs over time.
"Sustainable financing options provide another pathway to balancing ESG commitments with financial discipline. Accessing green bonds, sustainability-linked loans, and government incentives allows businesses to fund ESG initiatives without compromising profitability."
He adds that tying financial performance to sustainability metrics ensures that achieving environmental targets contributes to business growth rather than being seen as an expense.
"Technology and data analytics play an essential role in integrating ESG into financial decision-making, which can be simplified through automating ESG reporting, tracking real-time sustainability performance, and linking these data to financial KPIs to enhance transparency and compliance while optimising resource use."
Moreover, Soh notes that effective ESG integration also requires collaboration across departments, ensuring that sustainability considerations are embedded into procurement, operations, and overall business strategy. This includes engaging with suppliers to improve ESG performance to reduce long-term risks and create more resilient supply chains.
Key strategy
One key emerging strategy that finance leaders can adopt to drive both sustainable growth and cost-efficiency is the integration of ESG data into financial decision-making through AI and automation.
In Soh's view, as businesses face increasing regulatory scrutiny and stakeholder expectations, leveraging technology to enhance ESG tracking and reporting is becoming essential for balancing sustainability goals with financial performance.
"By embedding AI-driven analytics and automation tools into financial operations, organisations can streamline ESG data collection, improve carbon accounting accuracy, and gain real-time insights into sustainability performance."
This allows for proactive cost management, as inefficiencies, such as excessive energy consumption, waste, or supply chain risks, can be identified and addressed more effectively, while reducing compliance costs and administrative burdens, freeing up resources for more
strategic initiatives.
"Beyond compliance, integrating ESG data into investment and capital allocation decisions ensures that sustainability efforts generate measurable financial returns."
He believes finance teams can assess the long-term impact of green investments, model different sustainability scenarios, and make informed choices on resource allocation, enabling businesses to align ESG commitments with profitability, demonstrating to investors and stakeholders that sustainability is not just a responsibility but a driver of long-term financial resilience.
"As regulatory frameworks and investor expectations continue to evolve, leveraging AI and automation for ESG integration will become a critical advantage to optimise costs, meet sustainability targets, and drive competitive growth in a rapidly changing business environment."
