The CFO and finance team, including the ESG team, are central to sustainability efforts, managing reporting, aligning initiatives with long-term planning, and allocating capital. Their role is to also navigate the complex field of sustainability regulations while using technology and data to assess risks, manage costs, and identify growth opportunities.
While some CFOs view this expanded role as a natural extension of their focus on long-term value, others may struggle with sourcing the capacity, skills, resources or budget to respond effectively to ESG pressures. That said, companies that proactively address climate-related risks and opportunities are known to be likely to perform better financially. Leading businesses prioritise sustainability not just for the sake of compliance but to cut costs, drive growth, and build resilience.
So what is the role of the CFO in all this? Below we identify some action points that the finance team, under the direction of the CFO, together with the ESG team, can take to turn sustainability into a strategic advantage:
- Embed sustainability into strategy
- Engage the organisation on sustainability
- Incorporate tax into sustainability
- Lead on sustainable capital projects
- Get reporting and compliance right
- Use tech and AI to streamline sustainability
Embed sustainability into strategy
CFOs are ideally placed to coordinate sustainability initiatives across locations, business functions, third parties, and obtain regulatory approvals, which often run simultaneously within a company.
Changing market conditions can make sustainability plans outdated, but CFOs who integrate them into corporate strategy can achieve financial and operational benefits.
To prioritise sustainability, CFOs can support the allocation of dedicated financing and establish an internal cost of carbon to compare decarbonisation projects with other investments.
Engage the organisation on sustainability
- CFOs must engage the entire organisation in sustainability to ensure strategic progress.
Gaining support starts with the CEO and board. CFOs can help highlight sustainability’s role in long-term growth and resilience.
Incorporate tax into sustainability
Companies can access tax credits, incentives, or grants for sustainability projects. Maximising these benefits requires strategic planning and understanding evolving legislative and regulatory landscapes.
A multidisciplinary approach involving tax, operations, sustainability, capital projects, finance, and business development helps optimise tax costs and improve returns on sustainability investments.
While such tax opportunities can create additional value, finance teams are often excluded from sustainability strategy discussions, demonstrating the importance of wider collaboration with the CFO.
Lead on sustainable capital projects
- Achieving sustainability goals through capital projects requires new approaches as projects increase in number, complexity, and scrutiny. The CFO’s skills lend themselves well to embed financial best practices within ESG related projects.
These can take various forms, from HVAC upgrades and BMS implementations, to large-scale projects like on site installations of renewable energy or office renovations, which are sure to overlap with the CFO’s role.
Get reporting and compliance right
- As sustainability reporting shifts from voluntary to mandatory, this will require accounting-level rigour and potentially affect entities beyond the EU.
Compliance now demands closer collaboration between finance, operations, HR and sustainability teams to manage ESG data effectively. CFOs and ESG leaders must therefore understand how ESG data moves through company systems, from sourcing to calculation, to ensure accuracy.
Strong controls and processes help detect inconsistencies and avoid penalties for noncompliance. The role of the CFO here is to leverage existing systems and reporting tools to facilitate and enhance reporting.
Use tech and AI to streamline sustainability
- CFOs, alongside CSOs and technology leaders, must establish controls and governance to ensure data reliability, enabling seamless collection and sharing across departments and external partners.
A holistic data approach helps leadership make informed decisions, aligning sustainability initiatives with both long-term goals and immediate regulatory requirements. Integrating this with existing financial or ERP systems will be crucial.
As sustainability becomes integral to finance, CFOs must upskill their teams, balancing technical expertise with collaboration and strategic thinking.
How can we help?
Beyond supporting your existing or planned sustainability initiatives, our teams can assist your organisation in meeting reporting and strategic requirements. This could include support with understanding material sustainability matters, carbon footprint assessments (particularly around scope 3 emissions), assessing ESG data and systems, and broader ESG training.
In addition, we can help provide the necessary support to your CFO to align sustainability goals with strategic decision-making, leverage data analytics to monitor and optimise performance, and develop comprehensive ESG strategies. If you are interested in exploring these opportunities, please reach out to our dedicated teams.
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