With over 530 participants and 350 CFOs attending and top speakers including former Prime Minister Ruud Lubbers and former Executive Secretary of the UNFCCC Yvo de Boer; CFO Day, last week’s event for financial leaders in the Netherlands had it’s 10th anniversary. The theme for this event was ‘Value Driven Corporate Sustainability’, a topic that increasingly has become a Boardroom theme.
On behalf of Gold partner Accenture, Bart van der Mark and I had the opportunity to present our (interactive) session titled ‘The role of the CFO in integrating sustainability in the organization’, about the role of the CFO, the value of sustainable performance management and a free format discussion about the role of sustainability in outsourcing programs.
We started with Accenture’s comprehensive definition of sustainability: “The way an organization, on its path to high performance, creates value for its stakeholders by leveraging its assets and capabilities to drive innovation and profitable growth through striving for a positive economic, environmental, and social impact”.
Sustainability goals are becoming more ambitious and are directly related to innovation, growth and cost reduction. Companies are shifting from strategy to execution to maximize value from the Sustainability Agenda. According to the UN Global Compact CEO study 2010, 96% of CEO’s worldwide want sustainability to be fully integrated in their strategy and operations (up from 72% in 2007). Currently the role of the CFO with regard to sustainable performance is limited, but with the increasing need to get a better grip on sustainable results, this role gains in importance. Sustainability is no longer limited to being a requirement for external reporting, but as a driver for innovation and growth impacting the business agenda on all levels. The development of a robust sustainability performance management process is a crucial enabler in this for monitoring, reporting and driving actions. The CFO plays an essential role in several critical sustainability areas including:
- Define sustainability targets, KPI’s and metrics
- Ensure auditable Sustainability Quality Assurance processes
- Integrate financial and non financial agenda
- Balance sustainability within the investment portfolio
The second half of the session (the interactive part) revolved around the key question: “What effect does moving activities have on a carbon footprint and what other economic and social factors play a part in this?”. With polls and statements including “outsourcing always has a significant impact on CO2 performance” and “the sustainability agenda for outsourcing needs to look beyond CO2 reduction”, the audience was asked to participate, discuss and share their point of view on the impact of outsourcing.
The impact of outsourcing heavily depends on the type of industry and outsourcing. As Outsourcing inherently leads to a shift of Carbon emissions from a company’s own operations (scope 1 and 2) to its suppliers (scope 3), it not only impacts the environmental performance of that company, but it can also lead to a reduced control of carbon emissions over the entire value chain. Depending on your outsourcing partner this can be an opportunity or threat. A partner can play several roles in supporting a companies sustainability targets by i.e. providing environmental data to support (external) reporting, support the company in achieving its environmental goals or even set-up joint programs to maximize positive impact on the local community. This role of outsourcing partners is currently not being recognized extensively in the selection of Outsourcing partners. Therefore sustainability needs to be paired with outsourcing programs.
Accenture is planning to organize a round-table session in September 2011 about “Sustainability as a driver for growth and innovation” with inspiring stories per industry, an interactive session among peers and insight in sustainability data. For further information about Sustainability, Outsourcing or (to register for) the round-table session, please contact:
Jeroen van Heiningen
Head of Sustainability Services Netherlands
Bart van der Mark
Senior Manager BPO
Business Process Outsourcing