Deloitte recently released a new whitepaper entitled, “CFOs and Sustainability: Shaping Their Roles in an Evolving Environment.” The whitepaper compares the results of Deloitte’s 2013 CFO Sustainability Survey against those from the company’s 2012 survey. The findings reveal some interesting trends as they relate to the role of the CFO when it comes to sustainability.* According to Deloitte, CFOs are becoming more involved in setting and executing sustainability strategy. In fact, in 2012, 27 percent of CFOs surveyed said they are always involved in setting sustainability strategy. In 2013 that number climbed to 43 percent. In 2012, 32 percent said they are always involved in driving organizational execution of their firm’s sustainability strategy. In 2013 the percentage jumped to 45 percent. A total of 73 percent of respondents said their involvement in sustainability had increased or slightly increased during the last year. Eighty percent of respondents expect their involvement in sustainability to increase or slightly increase in the next two years.
The survey found that CEOs are increasingly accountable to the board for a firm’s sustainability strategy (62 percent in 2013 compared to 44 percent in 2012). The impact of sustainability on key financial decisions has increased in M&A (to 48 percent in 2013, up from 33 percent in 2012), capital allocation (60 percent, up from 48 percent in 2012), and capital raising (55 percent, up from 44 percent in 2012). Compliance with new energy efficiency and carbon regulations was most often cited as a very important sustainability-related finance initiative in 2013. This was also the case in 2011 although, in the 2012 survey, compliance was edged out (by one percentage point) by investment in cleantech products.
Key areas cited by CFOs as being those in which they “plan to make capital investments in the next two years” include industrial emissions reductions equipment (61 percent), building energy efficient equipment (61 percent), software for energy and carbon management (54 percent), and software for environmental management (50 percent).
When asked to select among barriers to capital investments in sustainability initiatives, CFOs most often noted failure to pay back within two years—cited as first or second most significant by a total of 64 percent—and the business case benefits not being properly quantified—cited as first or second most significant by a total of 49 percent, followed very closely by the benefits being too small compared with those of other potential projects (at 48 percent).
To access the complete report, click here.
*On behalf of Deloitte, Verdantix interviewed the chief financial officers, finance directors, or, in non-English speaking nations, their equivalents in 250 companies in 15 different industries and 15 countries (including countries from the Middle East and the Benelux states). Each company had annual revenue greater than $1 billion. Average annual revenue was $11.5 billion. Total revenue of all companies exceeded $2.9 trillion. Industries represented include automotive, basic resources, business services and media, chemicals, construction and materials, energy and utilities, financial services, food and beverages, hotels and leisure, industrial and high-tech engineering, personal and household products, pharmaceuticals and medical, retail, technology and telecommunications, and travel and transportation. A minimum of 12 interviews per industry were conducted.