The research, carried out in association with Business in the Community Ireland, shows that Irish CFOs identified sustainability as having the strongest impact on long term value creation, compliance, risk management and building trust. This was followed by cost control, revenue generation and investor relations.
The survey was carried out to garner views on the importance placed on sustainability programmes within Irish organisations, and the extent to which driving these programmes falls under the remit of the CFO.
Sustainability, along with non-financial reporting, is likely to become increasingly important as the EU is currently progressing legislation that would require non-financial reporting by CFOs. Over half of respondents to the survey (58%) think that it is important for sustainability programmes to be part of the CFO’s role. Those areas deemed most important to their role are the marketplace, including supply chains and customers (28%) and the workplace (24%), followed by communication, governance and reporting (19%), the environment (15%) and the community (15%). With regards to the supply chain, the results of the survey show that just over a third of CFOs incorporate sustainability dimensions into their company’s bidding and/or procurement processes.
Ciaran O’Brien, Partner, Deloitte commented: “Sustainability and non-financial reporting are becoming increasingly important in today’s marketplace as a means of driving value. Whereas traditionally many companies believed that sustainability issues fell within the remit of various functions including HR, marketing or investor relations, Irish CFOs are now aware of the benefits of driving these programmes. Increasingly, stakeholders such as investors, customers and employees are expecting organisations to meet standards of social, environmental and economic performance, the so-called triple bottom line.”
In light of the forthcoming EU legislation that would require non-financial reporting, it is interesting that survey findings show that merely 28% of CFOs report on non-financial measures such as social and environmental impacts as part of their reporting cycle.
Tina Roche, CEO of Business in the Community, commented: “Today’s CFO is tasked with sustaining the enterprise as opposed to the environment. However, viewing the CFO’s role through the sustainability lens ensures that the long term economic viability of the organisation as well as a balanced view of social and environmental impacts is considered. This research shows categorically that CFOs believe that there is a direct link between sustainability and business performance yet less than 30% of companies report on it in their annual reports. This may be due to lack of measurement or the lack of understanding in the power of openness and transparency. This has to change if we are to restore trust in business, drive competitiveness and make Ireland a great place to do business.”
Of those CFOs that indicated their company does report on non-financial measures, 31% stated that it was integrated throughout company reporting. A further 31% stated that they produced separate sustainability and CSR reports. For full details of the Deloitte Q2 2012 CFO Survey, please visit www.deloitte.com/ie/cfo-survey.
About the survey
This is the twelfth in a series of quarterly surveys by Deloitte of Chief Financial Officers of major Irish based companies. The survey was conducted in June 2012. The Deloitte CFO Survey is the only survey that seeks to establish the views of CFOs in relation to relation to the financial markets, economic outlook and business trends on a quarterly basis.