In 2023, Utrecht University, St. Gallen University, Finance on a Mission, Oracle and UiPath jointly conducted a research on the ongoing transformation of Finance. The study reveals that CFOs are becoming increasingly involved in sustainability. At the same time, it is highlighted that organizations are still actively exploring how to effectively embed ESG (Environmental, Social, and Governance) in their operations.

In our study, we found that 59% of the organizations consider ESG issues in strategic planning now. And 58% of the organizations is reconsidering their supply chain related to the organization’s footprint. No wonder that Finance involvement in ESG is increasing, with 61% of CFOs having ESG management as a part of their responsibility. But we also find that organizations focus primarily on their own organization, when gathering data about ESG performance. And in our dialogue sessions we found that a lot of organizations are still unclear on what to measure.

The role of the CFO in ESG is increasingly important

 Most Finance Executives in our research paper expect a higher priority for ESG in operations, with ESG cascading down through the supply chain. Not only the larger organizatios are impacted, but also smaller organizations are part of a supply chain and must prove their ESG performance to remain relevant. Many participants indicated that implementing ESG at the core of operations takes time. It starts by setting a clear strategy for ESG. What does the organization want in terms of ESG? The strategy then leads to setting targets. And with the right support from management, steering toward those targets can begin. This is a call to action for the CFO and the Finance function. Structuring data, and reporting on the organization’s performance is a Finance competence above all.

In a blog post, Clare Nkweto Simmonds, director at Deloitte MCS, shares her view on the on the changing role of the CFO in relation to ESG. You can read the blog post here: