Some 69% of chief financial officers expect to generate higher returns from sustainability initiatives compared to traditional investments, a new study by Kearney has found.
The global management consultancy’s Staying the Course: Chief Financial Officers and the Green Transition report was conducted alongside media platform We Don’t Have Time, and surveyed more than 500 CFOs from the United Kingdom, United States, United Arab Emirates, and India.
It indicates that CFOs are confident in the ‘long-term value and profitability of sustainable investments’, with 92% of respondents stating that they expect their organisations to significantly increase net investment in sustainability in 2025.
The business case
In addition, while some 93% say that they ‘recognise the business case for sustainability investments’, the motivation behind this investment varies, with more than three fifths (61%) seeing sustainability investment primarily as a cost rather than an opportunity for long-term value creation.
Two-thirds of respondents (65%) added that they are now measuring the financial risk of inaction, ‘ signalling an increasing awareness of the long-term risks posted by climate change and regulatory penalties, as well as opportunities related to green transition’.
Elsewhere, 71% of CFO’s are now factoring sustainability considerations into their employee retirement fund decisions, and 94% say that they incorporate said considerations into their broader investment decisions.
A ‘crucial’ role
“The perspective of CFOs is often overlooked in the corporate sustainability debate, yet their role is crucial,” commented Beth Bovis, partner at Kearney and global sustainability lead. “As those in control of financial levers, CFOs are uniquely positioned to have a long-term impact on business strategy. And our study highlights that they’re already taking steps in this direction.
“ESG reporting is increasingly falling under the CFO’s responsibilities. But beyond simply ensuring regulatory compliance, CFOs can lead the charge in driving investments that not only reduce emissions but also deliver tangible commercial value for the business.”
Ingmar Rentzhog, founder and CEO at We Don’t Have Time, added that CFOs are “increasingly absorbing” more of the sustainability efforts undertaken by their organisations, and “are more than prepared for this responsibility”. Read more here.
