Date posted: 14/01/2021

Report identifies sustainability as a key action for finance teams in response to the pandemic

An international report identifies action areas for Chief Financial Officers (CFOs) and finance teams in response to the COVID-19 pandemic, including directing capital away from unsustainable outcomes and towards the innovative solutions the world needs

The Building a Better Future report indicates companies with strong environmental and social credentials performed better during the pandemic.

The Accounting for Sustainability (A4S) Project’s report out today brings together conversations with CFOs and other members of the finance and accounting community from around the world regarding COVID-19 responses, reset and recovery.

“CFOs are in a unique and powerful position to ensure that resilience and sustainability are built into corporate strategy and business planning during the response, reset and recovery phases of the pandemic,” said Karen McWilliams, Chartered Accountants Australia and New Zealand’s Business Reform Leader.

“As the report says, CFOs are well positioned to influence CEOs and boards - offering a multi-capital, multi-stakeholder perspective and identifying the trade-offs between short-term and long-term outcomes.”

The Accounting Bodies Network (ABN) of A4S has also released a report that looks at how the 16 professional accountancy bodies belonging to the ABN, including Chartered Accountants Australia and New Zealand (CA ANZ), have responded to the COVID-19 pandemic.  It also explores the actions accountancy bodies will take to reset and rebuild a more sustainable economy.

The Building a Better Future report was informed by interviews with leading global CFOs and other members of the finance and accounting community. It says “purpose-led organisations have shown that they have competitive advantages and less exposure to risks, making them better prepared to weather the pandemic and its aftermath”.

The report identifies five key actions for CFOs and finance teams:

  1. Cementing a purpose-driven mindset
  2. Setting ambitious targets
  3. Performing proactive scenario analysis
  4. Collaborating with others
  5. Accelerating the adoption of global standards

“These areas are central to taking forward the lessons from the pandemic and accelerating the transition towards a sustainable economy,” the report says.

It also highlights the crucial role accountants played in helping businesses, especially SMEs, to shore up finances, access government support schemes and put in place the financing needed to survive COVID-19 in the short term.

“CFOs and finance teams have an essential role to play in supporting their organisations and the wider economy to transition,” the report says. “They have a number of tools that they can bring to bear which the response to the pandemic has demonstrated as key.”

These include:

  • Pricing risks appropriately so that short-term benefits can be properly weighed against future potential costs.
  • Establishing more robust risk management frameworks and proactively performing scenario analyses that help manage future uncertainty.
  • Integrating sustainability processes and controls with operational and financial performance management to provide rigour and deliver long-term goals.

“These areas are central to taking forward the lessons from the pandemic and accelerating the transition towards a sustainable economy,” the report says.

As part of organisational resets, CFOs should use their influence to promote and embed a purpose-driven, multi-stakeholder strategy and business model.

“Organisations need high quality financial information to improve their risk models, produce transparent reports and set and measure social and environmental targets. Collaboration is essential for tackling what lies ahead and will require finance teams to learn new approaches and share best practices.”

The report says there is an “increasing appreciation that a multi-stakeholder, multi-capital approach offers a holistic view and a strong framework for better business performance”.

Building a Better Future

How do we rebuild for greater resilience?  A4S has been in close contact with its networks to understand and shape the answer to this question.

Read the reports

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