In what capacity should the CFO be responsible for the sustainability of his company? While 13% of French companies say their environmental initiatives already have a positive impact on their revenues and profit opportunities, only 12% of them designated the financial director, although essential to the investment strategy, as responsible for these efforts, reveals software company SAP’s annual sustainability report*.
Only 7% of companies entrust CSR responsibility to the DAF
Despite the link between environmental actions and increased long-term profits, the SAP study shows that French companies only rarely involve financial directors in their environmental roadmap, which slows down progress. Currently, only 7% of companies entrust responsibility for the strategic direction of sustainable actions to their CFO. Rather, this responsibility falls to other leaders, including Chief Risk Officers (10%), Chief Operating Officers (11%), CEOs (24%) and the Board of Directors (22%). The study suggests that this approach does not work to translate the economic value of sustainability progress across the business. Up to 36% of French companies identify financing problems as one of the five main barriers to sustainable actions, while 15% fail to gain support from key decision-makers to take concerted action. Greater accountability of the CFO could remedy this.
Sustainability: financial burden or opportunity?
If 87% of French managers will maintain or increase their investments in sustainable approaches by 2026, with the aim of obtaining better economic returns, French companies continue to create their own obstacles to this progress. So, four in ten companies (41%) have difficulty measuring return on investment.
But we are witnessing a paradigm shift, because once perceived as moral or ethical obligations, initiatives aimed at protecting the planet are now considered by French companies as long-term financial opportunities. Indeed, 34% say revenue and profit opportunities are the key driver of sustainable investments. And more than half (53%) of these executives anticipate a positive financial return on their sustainability investments over the next five years.
But if governance and the ROI issue of sustainable investments seem to be obstacles, the difficulty of measuring GHG emissions is another. Thus, only 43% of companies are able to calculate their greenhouse gas emissions linked to their activity and 12% of them cannot track the emissions produced indirectly in the supply chain.
*The global study which surveyed more than 4,700 business leaders, including 200 in France, is the third edition of SAP’s Annual Sustainability Report.
2023-12-05 16:30:37
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