Embedding ESG is indeed a cross-functional endeavor within the organisation, as every department – from procurement to marketing to finance – has a distinct role to play in implementing ESG.
It should be noted that ESG integration is not a mere rearrangement of responsibilities but an evolution that requires businesses to address gaps in their organisational structure.
The embedding of ESG across all functions ensures that sustainability becomes an integral part of the company's DNA rather than a standalone initiative.
That can in part be done through ESG lobbies to ensure that insights are fed back across the whole organisation and are clearly visible across the business units, allowing ESG-related supply chain data to be seen and understood by the relevant parts of the company.
Strategy into financial action
The role of chief financial officers and finance leaders in sustainable governance is far-reaching.
ESG has increasingly been seen as a key focus area and CFOs have a multi-faceted role to play when it comes to delivering on the organisation’s core ESG-related goals.
They serve not just the stewards of the organisation's financial health but also vital ‘translators,’ getting feedback from customers – and then helping develop ESG strategies that embed financial terms, but then translating those into objectives that can be read, understood, and acted upon by the business. In that sense, they are effectively transformation agents for the business.
Building on that role, their ability to interpret and make best use of it empowers them and enables them to drive the organisation forward. Finance leaders preside over the ESG regulations and deliver change on one level.
When CFOs analyses them in more detail, they realise that ESG is potentially delivering much more, enabling them to help build governance structures, design processes and implement relevant policies.
They assess the financial implications of sustainability initiatives, bringing much-needed transparency to reporting. By weaving ESG strategy into financial action, CFOs are paving the way for channeling capital towards ESG investments, thus solidifying the financial feasibility of sustainability. This holistic approach to reporting – merging financial insights with sustainability data – is an essential step in aligning ESG with fiscal goals.
Additionally, CFOs can influence corporate strategy to ensure ESG factors are considered in long-term planning, investment, and operational decisions. They can help allocate resources to ESG initiatives, ensuring they contribute to financial performance and value creation, which is crucial for investor relations.
