Demonstrating profit and purpose
From their position looking across the organization, CFOs can guide sustainability and social justice conversations by articulating the many ways that more ethical practices create value for their companies, financially and beyond.
Take diversity, equity, and inclusion. Substantial research has shown the advantages diversity brings to an organization, with the World Economic Forum highlighting increased profitability and creativity, stronger governance, and better problem-solving. Diverse backgrounds bring diverse perspectives, experiences, and ideas that create resilience and differentiation.
The case for a strong environmental, social, and governance (ESG) proposition is equally compelling. Recent meta-analysis from the NYU Stern Center for Sustainable Business across more than 1,000 research papers found a positive relationship between ESG and corporate financial performance in 58% of the studies surveyed and in 59% of studies on investment performance.
As well as improving top-line growth, research from McKinsey & Company highlights how addressing ESG issues can reduce rising operating expenses, drive consumer loyalty, and reduce regulatory interventions. And instilling a sense of purpose across the business also boosts employee productivity.
Unilever's Sustainable Living Plan, for example, demonstrates this impact in action. The company's sustainable living brands have consistently outperformed the average growth rate of Unilever products. And through its eco-efficiency program, Unilever has avoided over $1.4 billion in costs since 2008. The company is now the number-one employer of choice among fast-moving-consumer-goods firms for graduate students in 54 countries.
With more than $20 trillion set to flow into ESG funds over the next two decades, according to Bank of America, stronger ESG propositions are becoming important to investors too. And the same goes for the viability of emerging sustainable finance options. Global container logistics company Maersk, for example, has secured a sustainability-linked revolving credit facility of $5 billion, based on its ability to meet its target of reducing CO2 emissions per cargo moved by 60% by 2030.