Introduction and challenges
For a long time, businesses have seen sustainable development as first and foremost a matter forCorporate Social Responsibility (CSR) officers. However, the topic has gained importance to become a key focus in other parts of the company, namely the finance function.
Indeed, governmental regulatory frameworks require more reporting on environmental impacts, and there is growing demand from investors regarding performance; they want to see KPIs and evidence of close attention to these topics, with tangible progress. But above all for many companies, environmental transition has become a strategic question in its own right, about new propositions for customers to meet new expectations, transforming the company’s operations, and fulfilling the commitments of a responsible employer.
In this context, the Chief Financial Officer (CFO) plays a key role in bringing together the
sustainability agenda and overall business strategy and management, for example by challenging the business in management dialogue as well as in investment decision-making processes. Of course, we must not seek to establish a direct link between impact measuring tools and financial reporting, since the latter follows first and foremost accounting orthodoxy. However, the CFO needs to provide the necessary structure, tools, and reporting to steer the company’s sustainability strategy and performance. The question is what are the appropriate indicators to take into account and how should they be measured.
How we can help
Argon & Co mobilises experts from operations as well as from the finance function to support our clients in updating their management framework and investment process, with the integration and valuation of environmental and social information.
Integrate sustainability impacts into internal management dialogue
- Working with operations to quantify and analyse environmental impacts along the
company’s end-to-end value chain to identify improvement actions to be implemented
- Defining appropriate new KPIs and how they should be calculated, according to the
company’s sustainability challenges and action plans
- Support in integrating these KPIs into the CFO dashboard and into the company’s management routines
Adapt the investment decisions process
- Working with operations to identify and evaluate investment opportunities and risks following environmental impact analysis
- Integrating sustainability criteria into investment decisions by modelling and estimating the environment impact of a decision of future Capex project
Support in design reporting for financial community
- Support in building an extra-financial reporting for investors, banks, and other external partners as part of their request