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Sustainability: Why CFOs are driving savings and strategy

A CFO Insight 

A survey of CFOs shows they aren’t interested in sustainability just because of its cost-saving potential; they also see a strong link between sustainability performance and financial performance.

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THIS has been a critical year for sustainability and business. At the Rio+20 Corporate Sustainability Forum in June, more than 1,000 corporate leaders pushed for new regulations and measures to incentivise moves to a green economy. Pending European Union regulations are expected to make certain types of nonfinancial reporting, including environmental reporting, mandatory in the near future. And the International Integrated Reporting Council (IIRC) is putting the finishing touches on its first framework, which is expected to debut in 2013.

Sustainability has obviously arrived on many corporate agendas. And judging from the results of a new Deloitte Touche Tohmatsu Limited (DTTL) study of CFOs, it has also landed squarely on the CFO agenda. In fact, while sustainability may have taken a back seat to dealing with the global economic malaise of the last few years, it has now emerged as a finance priority not just because of regulations and the push for transparency—but because it has been demonstrated to be a valuable weapon in a CFO’s cost-cutting arsenal.

 

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How Irish CFOs view sustainability

In the second quarter of 2012, the Deloitte Ireland CFO Survey—in conjunction with Business in the Community Ireland—looked at CFOs’ views on various aspects of sustainability (see “Deloitte Ireland CFO Survey: Sustainability and the CFO, Quarter 2 2012 survey results”).

What is clear is that Irish CFOs are embracing sustainability in a bigger way than many of their global counterparts and are increasingly involved in the management, measurement, and reporting of companies’ sustainability programs. In fact, 93 percent of Irish CFOs believe there is a direct link between sustainability programs and business performance. Moreover, 58 percent of CFOs noted that it was extremely important or important for sustainability programs to be part of the CFO’s role, with a mere 6 percent of CFOs deeming it unimportant. As one respondent noted, “Sustainability is … simply a matter of common sense and good business.”

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