Making the transition to a sustainable organisation means change, and innovation. To guide your team through this, you need leadership and vision. Your team needs to know why change is happening, and clarity on how it will happen. You need to answer questions with confidence.
Shifting culture means creating motivation for change. It’s about incentives. You might feel transition is important, but if the rest of your team doesn’t, it won’t get far. So, as with any other strategic initiative, you must share a compelling vision for the future. This includes cogently articulating how climate change impacts our lives, and how our lifestyle impacts climate change. Your team needs to understand why transition is important to address now by helping them understand the difference between carbon neutral (buy your way out of the problem) and net zero (the real deal). This is where building climate literacy matters - making it a part of your organisation with consistent language and measurements for sustainability, the same as any other business metrics.
It’s not just operational teams you need to engage. It’s your board too. Sustainable transformations require investor and board buy-in. CFOs are well placed to translate climate into business-relevant terms. CFOs can explain sustainability’s financial benefits including resource-based competitive advantage, decreased energy and transport costs, enhanced brand-reputation and customer engagement. You need to be able to articulate potential scenarios, with data to support them.
Leading retailers and manufacturers, are adding sustainable products - and finding they perform better and deliver higher margin, than traditional SKUs (stock units). The opportunity is there. But it takes prudent investment. So your team needs to understand that what you implement will have the right impact.
You need to be able to show changes:
Driver-based scenario modelling is a core skill in an FP&A (Financial Planning & Analysis) team. They may not have modelled CO2e (carbon dioxide-equivalent emissions) before but like cost accounting, these are just numbers in a spreadsheet or an EPM (Enterprise Performance Management) platform.
Supply-chain experts also optimise for outcomes like on-time delivery and cost, so adding CO2e is again an extension to existing planning processes, not a completely new paradigm. However, it’s a journey: more granular data, prioritising materiality, identifying gaps, validating assumptions, and building your competency. You’ll need to invest time, money and resources here.
We’ve seen growth in Chief Sustainability Officers (CSOs). Often mid-sized firms do not have dedicated sustainability FTEs, so the champion may be the CEO or CFO. But even if you’re in an organisation with a sustainability team, the CSO cannot work in a silo from the CFO.
Many reporting and disclosure requirements focus on high-level historical data to support regulatory requirements and external investors. Looking backwards is a start, and can show you where your data capture is currently preventing you from accurately calculating actual CO2e. However, even more important is looking forward - what you are going to do, rather than what’s already happened.
This is where the CFO can play an outsized role. You can ensure sustainability plans are evaluated from a financial perspective. Building out credible plans, creating team-based incentives and tracking progress aligns operations, finance and strategy to achieve transformative change.
