Organisations that voluntarily adopt environmental and socially responsible policies outperform those without sustainability-related policies, new research has shown.
According to a new joint research paper from the Harvard Business School and London Business School, organisations with environmental policies tend to outperform their competitors in terms of both stock price and accounting performance.
The buck, it would seem, is being passed to CFO’s, because it is the finance chiefs who often oversee everything from HR through to IT, and because finance issues and sustainability issues are beginning to intertwine.
A report on sustainability from Ernst & Young stated: “CFOs are getting involved in the management, measurement, and reporting of the company’s sustainability activities. This involvement has expanded the CFO’s role in ways that would have been hard to imagine even a few years ago.”
According to the report, it is becoming more widespread that CEO’s and CFO’s are collaborating to ensure they have appropriate policies in place to address investor expectations relating to environmental and social responsibilities.
The Ernst & Young report said that as companies feel more shareholder and marketplace pressure to deliver transparent data on their sustainability practices, organisations will increasingly look to their CFOs for help and guidance.
However, the report also contained the recommendation that in order for finance leaders to ensure that there are appropriate policies, collaboration among those responsible for executing sustainability activities will be essential.
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