CFOs and other senior finance executives are citing environmental sustainability as an increasingly important issue for their companies, according to a new study.
The study, conducted by CFO Research in collaboration with Jones Lang LaSalle, also found that a range of significant financial benefits are achievable for companies that can implement strategies that truly reduce their impact on the environment. The study surveyed 175 corporate CFOs and senior finance executives. Among the key findings of the report:
* The highest priority objectives in corporate sustainability are regulatory compliance (ranked as a high priority for 61 percent and a mid-level priority for 26 percent of respondents), improving energy efficiency and reducing greenhouse gas emissions (a high priority for 47 percent, mid-level or 32 percent), and reducing the environmental impact of operations (45 percent and 32 percent).
* More than half of finance executives believe their companies are "very likely" or "somewhat likely" to increase revenue, reduce operating costs, improve investor returns and shareholder value, and improve employee retention through sustainability. The most often cited benefits were reduced risk ("very" or "somewhat" likely to produce benefits at 78 percent of companies), enhanced brand and reputation (77 percent), customer retention (72 percent), and improved employee health and productivity (68 percent).
* The greatest barriers to incorporating sustainability into financial strategy include the inability to measure the effects of sustainability on shareholder value (ranked among the top three challenges by 46 percent of respondents), inability to document the effects on financial performance (37 percent), and a lack of standard decision-making frameworks that consider environmental factors (36 percent). The least significant challenge was organization resistance, ranked among the top three barriers by just 20 percent of respondents.
Although most finance executives acknowledged that their own role in driving sustainability was limited, the survey results point to a tremendous opportunity for CFOs to guide their companies to sustainable strategies that bring financial success, says to Lauralee Martin, Global Chief Operating and Financial Officer at Jones Lang LaSalle.
"Most CFOs believe sustainability can lead to cost savings, increased revenues, greater customer retention and a competitive advantage, so clearly this is an opportunity that can not be ignored," Martin says. "The question each of us should ask is whether we are taking an aggressive enough position, given the rapidly approaching tipping point of this issue."