Chief Financial Officers (CFO) from Unilever, Sainsbury's and more than a dozen other large European companies making up the Chief Financial Officer Leadership Network (the Network) have published four guides to help the finance and accounting community address the practical issues of integrating sustainability into their business processes and decisions.
Prince Charles’ Accounting for Sustainability Project (A4S) launched the Network in 2013 to bring together leaders in the finance, accounting, and investor communities to drive a shift toward resilient business models and a sustainable economy.
The guides were developed by the Network and their teams (comprised of senior finance, risk, internal audit, investor relations and sustainability professionals), A4S and other specialists. Each guide is supported by case studies from Network members which demonstrate practical applications of the approaches and techniques set out in the guides.
The four guides are:
CAPEX: a practical guide to embedding sustainability into capital investment appraisal
Outlines how businesses can adapt their existing capital investment appraisal processes in a pragmatic and systematic manner to integrate social and environmental issues. The guide describes how traditional financial return-based investment decisions can be broadened, to make sustainability issues more explicit and transparent. Examples are also provided of how this can lead to more cost effective and resilient investment decisions.
Enhancing investor engagement: a practical guide for investor relations teams to engage on the drivers of sustainable value
Assists investor relations teams as they seek to engage 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 Network member’s experiences of the successes and pitfalls. It covers ideas that are quick and easy to implement such as incorporating sustainability information into investor presentations, to those that will take more time, such as moving away from quarterly reporting of financial results.
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). It sets out why it is important to adapt traditional risks management process to respond to these trends, and provides examples of how to overcome some of the uncertainty associated with their impact, so they can be better integrated into business decisions.
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. It explains the key terms finance teams should know, how broadening accounting frameworks can benefit business, and the central role of the finance team on collecting, analysing and reporting this new type of information. The guide suggests a set of overriding principles based on financial accounting principles to assist the decision making process. It explores the benefits and challenges of converting natural and social capital impacts and dependencies into financial figures, to gain the attention of decision makers.
CFOs more important than ever
A 2012 Deloitte study found that CFOs increasingly are ‘coming to the table’ in matters relating to board-level sustainability. The CFO role is now widely perceived as an enabler for sustainable business, as customers, shareholders and other key stakeholders are looking to connect corporate financial performance to social and environmental impacts, and accountability for this tends to rest at the door of the CFO.
Many companies today view sustainable business practices as a key part of their overall strategy, which is leading to increased demand for experienced executives who can help companies meet their environmental goals. Businesses need executives who can manage their business units effectively and also leverage their expertise to improve performance across the company.