CFOs Affirm Impact of Governance on Corporate Bottom Line

When chief financial officers (CFO) declare that environmentally sound business practices are a priority, it’s apparently that a major change has been taken place at the corporate suite. Finance people aren’t “green-washers.” They’re now part of the growing chorus of corporate leaders who recognize that responsible green-friendly policies aren’t a drag on business. They represent a potential business advantage that reaches all the way to the bottom line.

Last month, CFO Magazine held a conference on green business practices for financial executives where leading executives told the audience that sustainability initiatives have become a source of operational improvement, business innovation and new revenue streams.

“Sustainability has moved from risk mitigation to a business and revenue opportunity,” said Mark Newton of Dell Computer.

Executives from companies like Dell Computer, Caterpillar and Pitney Bowes reinforced what those of us in the EHS space have said for a while: Companies that embrace green business practices realize business benefits quickly when the corporate finance function contributes both to decision making and integration of the information flowing from sustainability initiatives into broader reporting and regulatory compliance initiatives.

That makes green business an integral part of broader corporate Governance, Risk and Compliance.
David Burritt, CFO of Caterpillar, said his company’s focus on sustainability efforts, which include redesigning product lines to become more energy efficient; expansion of its remanufacturing business; and broad adoption of new technology in both its internal processes and in its products, have delivered measurable improvements in business operations for the company and its customers. He called on his peers in the finance function to understand sustainability as a business opportunity, not as an inconvenience or a drag on the bottom line. But doing so requires the finance function to develop consistent measurements for sustainability across its operations and to “find the value in sustainable business and then drive action across the business.”

Pitney Bowes’ sustainability efforts have improved its product and service offerings to customers, the profitability of core business operations and its leadership position in its industry, according to CFO Monahan.

Sustainability must be part of a company’s overall GRC initiatives to reduce operational risk. Finance executives and investors have signaled that they understand the value implications of rigorous environmental performance management to that equation.

Add comment April 12th, 2008