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CFOs Can Have a 'Transformative Impact' on Sustainability, Says UN Global Compact CEO

By: 3BL Media

SOURCE: Workiva


A global spotlight has been placed on CFOs when it comes to corporate sustainability practices.

CFOs can have a "transformative impact" by "leveraging how corporate finance and investment is positioned to drive forward both a strong and sustainable business," Sanda Ojiambo, the CEO and executive director of the United Nations (UN) Global Compact, told me. The UN has made a “very clear call to action” for businesses to participate in sustainable development and “shift financing and investments in that regard," Ojiambo says.

I spoke with Ojiambo about the importance of sustainability the same week the UN's Intergovernmental Panel on Climate Change released a startling report on August 9 detailing how human activity is the cause of rising temperatures. Last year, she began her leadership role at the UN Global Compact, a corporate initiative created in 2000. The group supports 17 sustainable development goals (SDGs), such as gender equity, climate action, and sustainable cities. It currently has more than 10,000 corporate participants. Ojiambo previously served as head of sustainable business and social impact at Safaricom PLC, in Kenya. 

To help position CFOs as “architects” in long-term sustainable value creation, a small group of leading finance chiefs formed the UN Global Compact’s CFO Task Force  in December 2019, she explains. One of the key goals of the task force is to uncover the “best and the most holistic measure” for SDGs, Ojiambo says. For example, “what are the most relevant SDG targets and indicators?” she explains. And creating best practices on “how businesses should set relevant goals to demonstrate progress on the SDGs," Ojiambo says.

There are currently 60 companies with task force membership, represented by their CFOs, she says. “The goal is, by 2023, to be at about 1,000 members,” she says. I recently had a conversation about ESG with Jill Klindt, CFO, SVP, and treasurer at Workiva Inc., the first software-as-a-service company to join the task force, Klindt said

“We've had significant participation of the U.S. companies, which are sometimes not the first to join these types of initiatives; but this is a topic that has really attracted [their] interest,” Jerome Lavigne-Delville, a financial innovation consultant and member of the CFO task force's sustainable finance team, told me. ESG and sustainability were once topics not readily embraced by the U.S. finance sector, but it’s now become a societal norm, Lavigne-Delville says. “I used to work on Wall Street,” he says. “Not too long ago, it was really hard to talk about these things, and it's changed. And now it's become one of the hottest areas of finance.” 

It’s clear that for businesses to “survive and to thrive,” they need to take a long-term view on sustainability with a focus on inclusivity, Ojiambo says. There’s a strong performance correlation between businesses that are ESG and sustainability-focused and better financial outcomes, she says. The "overwhelming weight of accumulated research" finds that companies that pay attention to ESG "do not experience a drag on value creation," according to a 2019 McKinsey report. “A strong ESG proposition correlates with higher equity returns, from both a tilt and momentum perspective,” the firm noted.

But challenges can arise in determining practices in ESG disclosures, for example. I asked Ojiambo if the CFO Task Force is also focused on best practices in reporting metrics. “We're not a reporting standard or regulatory body,” she says. “We simply are reporting in line with the principles and the aims of the Global Compact.”

CFOs in the task force are working on solutions for corporate sustainability to become “truly embedded into business strategy,” Ojiambo says. The UN isn’t just looking for philanthropical responses to sustainability issues, she says. 

“It's really about how can companies shift their investments, their products, their services, their strategy to integrate the elements of sustainable development and drive the agenda forward?” Ojiambo says. 

“Taking an ESG-sustainability lens to business does work and does pay off,” she says.

For the latest news and information, visit The Workiva Newsroom

Tweet me: CFOs can have a ‘transformative impact’ on #sustainability, says UN @globalcompact CEO @SandaOjiambo. Read more here: @Workiva

KEYWORDS: NYSE:WK, Workiva, UN Global Compact, Sustainability

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