Kearney: CFOs Spearhead Corporate Sustainability Investments
"For months, we've seen headlines about companies walking back climate commitments. But a new global survey of 500 CFOs tells a very different story."
These are the words of Ingmar Rentzhog, CEO and Founder of We Don't Have Time, one of the world's largest media platforms for climate action, from a joint survey with Kearney.
The report finds that Chief Financial Officers (CFOs) are often absent from discussions on sustainability, yet they hold the power to shape corporate investment priorities.
Drawing insights from more than 500 CFOs across the UK, US, UAE and India, this study challenges fears that sustainability investments might falter amid economic and geopolitical uncertainty.
"With a slowing global economy, rising geopolitical tensions, and increasing extreme weather events, are CFOs still investing in sustainability?" poses Angela Hultberg, Global Director of Sustainability at Kearney. "What better way to find out than to ask them directly."
Strikingly, 92% of CFOs plan to increase sustainability investments, with more than half committing to significant increasesâsuggesting sustainability has decisively moved beyond a discretionary concern to become a core business imperative.
Despite sluggish global economic growth and mounting regulatory burdens, evidence indicates businesses are prioritising near-term sustainability measures that deliver immediate financial and environmental returns.
Immediate emissions reductions take precedence
Rather than broad, long-term sustainability goals, CFOs are directing funds towards initiatives with measurable short-term impact.
Key priorities include increasing sustainable materials usage, improving energy management, reducing waste and investing in sustainable partnerships and innovation.
Compliance with ESG regulations remains high on the agenda, reflecting continued regulatory pressure.
Such trends align with a global shift towards urgent emissions reductions by 2030 rather than distant net zero targets for 2050.
Notably, these efforts often align sustainability goals with financial objectives, as reduced energy consumption and waste management also lower operational costs.
Nevertheless, evidence suggests companies remain cautious about deeper, structural transformations that might require more substantial investment.
The evolving business case for sustainability
Corporate finance leaders increasingly recognise sustainability as a driver of business valueâa promising sign for global sustainability efforts.
An overwhelming 93% of CFOs see a clear business case for sustainable investments, whilst 69% believe these initiatives will yield higher returns than conventional investments.
Yet this optimism faces tempering by financial concerns, with 61% viewing sustainability investments primarily as a cost rather than a value creator. Increasingly, CFOs are factoring in the financial risks of inaction.
Research shows 65% already measure the cost of failing to transition to sustainable business practicesâa figure rising to 75% among US-based CFOs.
Investment models are being shaped by the need for future-proof operations against regulatory shifts, supply chain disruptions and changing consumer expectations, with 84% of CFOs adapting their financial evaluation frameworks accordingly.
Such optimism offers hope amidst numerous unpredictable externalities.
Mark Elsner, Head of the Global Risks Initiative at the World Economic Forum, recently described short-term economic growth forecasts as "bleak" due to "environmental, societal, economic and other concerns of recent years." He further notes increasing impacts of state-based conflict on the WEF outlook.
Sustainability embedded in financial decision-making
CFOs' positive response and redoubled sustainability efforts demonstrate not only their commitment but also sustainability's strength as a business case.
Beyond operational investments, financial leaders are embedding sustainability into broader financial strategies, with 94% incorporating it into overall investment decisions and 71% considering it when selecting employee retirement funds.
These actions signal a fundamental shift towards embedding sustainability principles across corporate finance, ensuring financial resources support sustainable growth.
This approach extends beyond individual companiesâby integrating sustainability considerations into investment strategies, businesses are influencing industries and markets at large, reinforcing the transition to a greener economy.
The CFO as a driver of sustainable transformation
With their unique position to drive meaningful progress in corporate sustainability, CFOs can align financial strategy with sustainability objectives to create measurable value, enhance transparency and build resilience against environmental risks.
Several key actions emerge for advancing sustainability in corporate finance.
CFOs must reframe sustainability as a strategic value driver, ensuring clear communication of green investments' financial benefits to stakeholders. Additionally, leveraging financial tools like green bonds and sustainability-linked loans can help incentivise sustainable business practices.
A call for financial leadership Despite ongoing economic challenges, corporate finance leaders continue demonstrating strong commitment to sustainability.
Evidence clearly shows that CFOs aren't merely responding to regulatory and reputational pressures but proactively integrating sustainability into financial decision-making.
As CFOs' role in the green transition grows, the business community must recognise sustainable investment's financial imperative.
"When done right, sustainability is good for business," affirms Beth Bovis, Global Lead for Sustainability at Kearney. "Kearney's survey of CFOs shows that even with changing political winds, investing in sustainability advances business goals."
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