Like every good crew sport, ESG reporting wants clear management, outlined roles and a playbook everybody understands. And finance is finest positioned to guide the aspect.
ESG reporting is now not the unique area of sustainability or compliance groups. As stakeholder expectations rise and regulation evolves, duty for delivering clear, auditable ESG knowledge is more and more shifting in direction of finance. However this shift can’t reach isolation.
The fact is that ESG reporting spans a number of departments – from operations and HR to threat and provide chain. That’s why it have to be approached as a cross-functional effort, with finance taking the captain’s function in setting course and maintaining the crew aligned on the technique. Solely finance has the methods, requirements and oversight to ship ESG knowledge with the identical integrity as monetary reporting.
To steer successfully, CFOs should embed ESG into core finance cycles: planning, budgeting, forecasting, funding decision-making. This implies establishing ESG as a strategic enter, constructing the workflows, controls and cross-functional collaboration wanted to make that shift stick.
A crew sport: ESG reporting is now not only a compliance operate
ESG has historically been used to draw buyers and measure an organization’s environmental, social and governance influence – and it nonetheless performs this function to at the present time. Corporations have additionally tended to deal with it as a compliance exercise, or a separate operate run beneath roles like a Chief Sustainability Officer (CSO) or the ESG division.
However the very pillars of ESG all influence company monetary efficiency. ESG initiatives, whether or not that’s making sustainable investments into provide chain selections or placing on social occasions to construct group connections, all want funding and assets. So, the finance division’s oversight for a way these are carried out is essential.
Consequently, it makes excellent sense that ESG reporting is included as a key a part of the finance operate – it may affect all the things from the place capital is invested to how firms discover new enterprise alternatives. And from receiving a return on funding to boosting model popularity, ESG schemes instantly influence enterprise efficiency too.
What this additionally demonstrates is the crossover between many departments. ESG is a holistic exercise, and the CFO has a number one function to play in coordinating cross-functional ESG efforts.
The captain’s function: How finance can lead with out proudly owning all the things
The perfect sports activities groups have a powerful tradition and id in how they play. In addition they have robust management and organisational construction. The senior management behind the scenes don’t take possession of on a regular basis coaching and matches, however they supply the funds and total technique that helps the crew to ship the most effective efficiency.
In an analogous method, regardless that ESG reporting must be a key a part of the finance operate, CFOs and finance leaders can lead with out proudly owning all the things. Totally different departments will desire a degree of possession over how they make selections. What finance can do is oversee useful resource allocation and make selections that finest align with total enterprise and ESG technique. Specifically, the CFO can act for example and set a top-down affect. They will encourage departments to look into ESG choices and make sustainability targets a part of the factors for reporting on their monetary efficiency.
What this relies on is collaboration – and more and more, a better degree of tech adoption. If robust traces of communication are supported by methods that join finance and different departments like operations, provide chain, advertising and HR, the extra tailor-made and unified ESG efforts will be. A crew effort that additionally helps particular person entities to carry out at their finest.
Techniques to embed ESG into monetary planning
Taking the lead on ESG is the set off to constructing consciousness of its significance and inserting it into monetary actions. To do that, step one is to mix ESG knowledge with finance knowledge – this entails incorporating ESG targets into actions like budgeting, forecasting and threat evaluation. Particularly, finance ought to look to stipulate clear, measurable ESG KPIs and align them with each enterprise targets and regulatory necessities.
However precisely measuring, analysing and reporting on ESG hinges on implementing efficient software program and processes that may present the mandatory efficiency insights. Reaching this requires utilizing a central finance administration platform that may connect with a spread of business-critical methods and present a real-time image of monetary and ESG efficiency throughout the enterprise.
Search for platforms which have options like multi-dimensional reporting, whereby customers can observe KPIs throughout their entities and drill down on numerous dimensions. For a mid-market firm, as an illustration, this is able to allow their CFO and finance crew to see how an ESG mission has contributed to a particular division or location’s efficiency, or to take a holistic view of ESG exercise throughout their group.
With this setup in place, finance can successfully talk and report on progress with numerous enterprise departments, places, the C-suite, suppliers and shoppers. In flip, this offers visibility and units up two-way communication, constructing the concept of ESG as a crew sport.
Main the aspect
The ESG playbook has advanced past the compliance operate. It’s now a crew sport requiring enter from throughout the enterprise. Specifically, ESG and finance instantly influence one another and so at the moment’s finance crew has a managerial function to play in integrating ESG reporting into enterprise technique. Particular person departments can and may take possession over their function within the crew – however finance offers the means and motivation for them to do that whereas overseeing the collective crew efficiency.
With the proper finance software program and processes at their disposal, finance can ship exact ESG reporting and show the worth of ESG programmes, each in shareholder worth and pure and social capital. This permits CFOs to allocate the mandatory assets and funds to contribute to actual, measurable change. And, above all, this implies they will goal ESG investments that assist long-term firm sustainability and progress.
There’s no query ESG reporting is a crew sport. Nevertheless it’s time for finance to step up and lead the aspect.
Meet the AccountsIQ crew on stand H11 at Accountex Summit Manchester, happening at Manchester Central on 23 September 2025.
For additional data, please go to www.accountexmanchester.com
