UK CFOs take charge: Prioritising sustainability for a better future

A large share of UK CFOs see the finance department as the most important business function in driving sustainability.

According to new research commissioned by energy procurement firm, Open Energy Market, over half of CFOs (53%) believe sustainability is very important to their role. A further 44% recognised the finance department as the primary driver of sustainability initiatives.

The survey, which captures the perspectives, opportunities and challenges facing 150 CFOs in driving sustainability initiatives across the UK, found a third (33%) think it is one of the most important aspects of their remit. A further 85% believe achieving net zero is important to business growth.

This represents a surprising shift in priorities, as sustainability has traditionally been seen as the domain of the Corporate Social Responsibility (CSR) department.

As companies face increasing pressure to reduce their environmental impact, CFOs are recognising the importance of integrating sustainability into financial decision-making. By doing so, they can not only improve their company’s reputation but also reduce costs and create new business opportunities.

“It’s encouraging to see the strong commitment of CFOs to prioritise the transition and make a difference,” said Chris Maclean, CEO of Open Energy Market.

However, the current practicalities of realising these goals can limit progress. CFOs identified an increase in overhead costs (27%), managing financial risk (24%) and complexity of renewable tech (21%) as the main barriers to signing off sustainability investments.

“If we’re to make these ambitions accessible to all organisations, a huge amount needs to be done to ensure that sustainability project proposals are based on accurate insights, robust modelling and a deep understanding of market volatility,” Maclean said.

CFOs face multiple complex considerations when it comes to green energy initiatives.

The main reasons for delay are the lack of cost-effective solutions to support the implementation of renewables (40%); a lack of technologies that offer investment-grade cost-benefit analytics of the business’s energy mix (37%); followed by limited access to expert partners and advisors to support the implementation of renewables (28%).

Utilising new technology

Almost half (48%) of CFOs say there is room to improve the alignment between procurement and sustainability teams, which suggests business cases for renewable investment require financial grade insights and a more cohesive approach to better engage finance teams.

Open Energy Market has developed a new data platform – named True – to help businesses with real-time visibility into the effectiveness of their ‘energy mix’.

“[True] is unique in that it provides a foundation of accurate data and insights for stronger sustainability business cases and effective carbon-neutral strategies,” Maclean explained.

“Replacing inaccurate conjecture and static spreadsheet modelling, the platform uses holistic, dynamic and bespoke financial modelling. This breakthrough from Open Energy Market builds confidence in decision making, accelerates action and is poised to expedite the journey to net zero.”

The platform integrates a business’s energy procurement data and its net zero goals; it factors in current energy costs, anticipated commodity prices and projected third-party charges to evaluate sustainability projects.

True allows businesses to also monitor and report on their Scope 1, 2, and 3 emissions, establishing a baseline year, and allowing organisations to keep a close eye on their progress over time.

“As we collectively work towards net zero goals, having up-to-the-minute data and insights on a business’s true energy costs and net zero strategies can unlock the path to a more sustainable future, faster,” says Maclean.

As the world becomes more conscious of its impact on the environment, sustainability has become a buzzword in every industry. The finance function has a crucial role to play in ensuring that companies prioritize responsible practices alongside their profit margins.

In the battle between green and greed, the finance function must step up as the gatekeeper of sustainable practices, ensuring that companies are held accountable for their impact on the planet while still delivering healthy returns to shareholders.

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