In a Nutshell: Chief financial officers are a critical part of your company's ESG programs, according to consulting firm McKinsey & Co.’s survey on the changing role of the CFO. The survey also found that CFO involvement supported greater alignment between these programs and the company’s strategic and financial objectives.
- The majority of respondents, which include company finance leaders, said when CFOs helped develop firms’ ESG practices, the programs were completely or very aligned with the company’s financial targets. Governance policies influenced by CFOs tended to be the most aligned with companies’ financial objectives (83 percent), though environmental (65 percent) and social policies (69 percent) were not too far behind.
- It was also noted that alignment with companies’ financial objectives dropped by 26 percentage points (pp), 29 pp, and 20 pp respectively across environmental, social, and governance practices when CFOs were not personally involved in developing ESG programs and practices.
Tell me more: Mckinsey & Co noted that CFOs can lead the way in evaluating ESG risks and opportunities by factoring ESG-related criteria into the company’s investment objectives and decision-making. CFOs are both qualified and in a position to drive changes in how their companies experiment with new technologies, evaluate ESG risks and opportunities, and execute transformations.
Complementary insights from CQ Roll Call, Part of FiscalNote