Why CFOs Need to Concentrate on and Invest in Sustainability
Corporate sustainability shouldn’t be placed on the sidelines. According to cfo.com, corporate sustainability should function as an integral part of a company’s overall business model. These types of initiatives drive growth and can help to boost a company’s reputation and brand image. However, while a great deal of attention is often paid to the execution of these sustainable strategies, it’s important for companies to consider the logistics of how to implement these initiatives. In short, CFOs have to recognize that these types of efforts make sound financial sense, and they must allocate and finance these strategies alongside all other standard business efforts as well.
For example, Starbucks recently supplied $500 million for its U.S. corporate sustainability bond, which is primarily focused on helping to make its supply chain more sustainable. An effort like this is not only beneficial for society and the environment, but it also will open up new opportunities for cost reduction and revenue growth. The World Economic Forum’s Beyond Supply Chain report noted that sustainable supply chain practices could help to reduce general costs by nine to 16 percent. An additional study noted that sustainability also helps to lower the overall cost of capital. Companies that pursue sustainability tend to perform more effectively than their non-green competitors. Publicly traded “green giant” companies (such as Nike and Toyota) report annual returns that are, on average, 11.7 percent higher than their competitors. Brand value, according to the WEF, can also see an improvement of 15 to 30 percent when a company pursues corporate sustainability.
Sustainability helps to boost capital, reduce risk, increase revenue, and improve a brand’s reputation. The benefits are sound and proven, so CFOs can no longer look at corporate sustainability as a side-venture—it needs to become a top priority, and CFOs must allocate the funds and resources needed to pursue corporate sustainability efficiently. Companies that are interested in pursuing more sustainable ventures should contact Good360. We help companies donate access goods or products to nonprofits in need—by donating, these companies cut down on their overall waste generation, and they also help out a worthy cause. To learn more, click here.