Sustainability is no longer a choice—it’s a necessity. As global attention shifts to sustainable practices, the North of England is setting a b example, achieving emission reductions 13% faster than the UK average. Initially, companies embraced sustainability to align with customer expectations voluntarily, but rising regulations and climate-related business risks have made it a priority. This shift is increasingly engaging key functions like finance, integrating sustainability into core strategic goals and daily operations.

What’s Driving This Shift?

• Changing Customer Preferences: Consumers are choosing products that uphold sustainability and social equity, influencing market dynamics significantly.
• Executive Prioritization of Green Innovation: According to Gartner, 25% of global CEOs are expected to make sustainability a core strategic priority by 2025.
• Investor Influence: Sustainable practices are now pivotal in investor decision-making processes, adding pressure for transparency and accountability.
• Regulatory Demands: The UK now mandates that organizations with over 500 employees disclose climate-related risks and opportunities, adhering to the Task Force on Climate-related Financial Disclosures (TCFD) guidelines.

Redefining the Finance Function’s Role

To adapt to this landscape, finance professionals—especially CFOs—are adopting new strategies to make their organizations more resilient and aligned with sustainability goals:

• Embed Sustainability into Core Metrics: Finance teams must integrate emissions, social equity, and sustainability data into performance models from the outset.
• Prioritize Investment in Green Initiatives: Choosing impactful sustainability initiatives requires thoughtful resource allocation and long-term planning.
• Manage and Report Sustainability Data: Ensuring that sustainability data is accurate and compliant is essential for building trust with external stakeholders.
• Incorporate Climate Risks into Risk Management: Proactively identifying and mitigating climate risks strengthens overall business resilience.
• Access Sustainable Capital: By focusing on low-carbon investment opportunities, finance teams can secure favorable capital.
• Align Financial Planning with Sustainability: Merging financial planning with sustainability targets will future-proof the organization’s economic and environmental impact.

Navigating Challenges in Sustainability

• Data Inconsistencies: Sourcing accurate, unified sustainability data remains complex due to varied sources and estimation.
• Skills Gaps: CFOs and their teams must cultivate expertise in sustainability, ESG criteria, and relevant regulations, as these domains are continuously evolving.
• Avoiding Greenwashing: Genuine commitment to sustainability is essential—mere appearances won’t suffice.
• Broadening Focus Beyond Emissions: A comprehensive approach that includes social impact and industry effects is crucial.

Leveraging Assets and Tools for Sustainable Success

Finance teams have several assets to drive meaningful sustainability:

• Core Competencies in Compliance and Analytics: Finance departments are well-versed in compliance, data management, performance tracking, and risk assessment, making them ideal stewards of sustainable practices.
• Advanced ERP Systems: New tools now allow the integration of sustainability data directly into ERP systems, streamlining reporting and transparency.
• Emerging Data Solutions: New data providers and fintech tools are expanding within the sustainability space, enhancing data accuracy and analytics capabilities.

Next Steps for Finance Leaders at Kore Consulting

To drive sustainable transformation, finance professionals should:

• Gain a Deep Understanding of ESG Requirements: Familiarize themselves with ESG requirements, organizational initiatives, and data sources relevant to their strategy.
• Develop Green Skills: Invest in upskilling and knowledge-building within sustainability and data analytics.
• Leverage Technology for Sustainable Reporting: Explore tech solutions that streamline ESG and sustainability reporting.
• Engage and Collaborate: Partner with industry leaders and networks, like Kore Consulting, to stay informed and share best practices.

Finance professionals hold a critical role in paving the way toward a sustainable future. By implementing these strategies and prioritizing sustainability, they can help their organizations thrive in an increasingly eco-conscious market.