ESG: A Key Driver of a Successful Strategy for CFOs

These days, business leaders view ESG criteria as a strategic pillar, far beyond a mere compliance exercise.

Our study on the skills sought in Chief Financial Officers (CFOs) finds that 81% of Chief Executive Officers (CEOs) and 71% of CFOs consider extra-financial reporting to be important.

In practice, tension persists between senior management and the finance function. CEOs view environmental, social, and governance (ESG) criteria as a competitive differentiator that eases expansion into new markets, enhances reputation and drives innovation. In contrast, CFOs still tend to associate ESG with additional costs, operational complexity and increased pressure on resources.

This divergence often stems from a misunderstanding. ESG is still viewed as a communication or marketing exercise, but in fact it is primarily a governance and decision-making support.

Measuring the quality of information facilitates informed decisions, which falls squarely within the finance function's purview. The CFO needs structured, reliable and traceable data to ensure the credibility of the company's decisions and commitments.

ESG: A natural responsibility of the finance function

ESG criteria are based on three tangible pillars, directly linked to financial drivers:

• Environment: energy, raw materials, GHG emissions (direct impacts on costs).
• Social: health and safety, absenteeism, turnover (impacts on productivity and operational continuity).
• Governance: data quality and reliability (quality of decisions and risk management).

When resources are limited, the solution is not to multiply initiatives, but to structure the collective effort.

The finance function defines the data format, collection frequency, and audit trail, while involving internal stakeholders (operations, procurement, human resources, information technology, health and safety) and external stakeholders (customers, suppliers, insurers, lenders).

When everyone relies on the same figures, priorities become clear, negotiable and achievable.

The CFO then orchestrates the ESG effort.

A regulatory framework that strengthens the CFO's role

Two Canadian laws highlight the importance of ESG in financial responsibilities.

Bill C-59

Now enacted, this law requires that any environmental claim be proven, verifiable and traceable. The CFO must ensure that public communications accurately reflect the company's actual performance.

Bill S-211

Enacted in 2023 in Canada, Bill S-211 mandates the annual publication of a report on risks related to forced labour and child labour in the supply chain. This requirement affects a large number of organizations, directly or indirectly, due to the demands of clients, contractors and partners that set conditions on access to public and private contracts.

Similar obligations exist in Europe. To access these markets or work with European organizations, companies must provide:

• reliable carbon data.
• structured information on the supply chain.
• verifiable evidence of responsible practices.

As laws evolve, expectations are converging.

A driver of performance and competitiveness

Organizational performance is now measured through results and impacts. The CFO plays a central role in ESG management. They structure the data, ensure its reliability, and link it to costs, investments (CAPEX/OPEX) and risks. Decisions made by all stakeholders (internal and external) are thus based on validated, shared data.

To effectively launch an ESG initiative, the following five priority indicators must be tracked:

• Health and safety: e.g., accident rates, frequency and severity;
• Energy consumption (kW per unit);
• GHG emissions measurement;
• Waste management (assessment of the recycling rate leading to a circular economy);
• Supply chain: e.g., the percentage of suppliers assessed according to ESG criteria.

These indicators are concrete, measurable, reliable and traceable, and have a direct impact on costs, quality, timelines and market access.

A tangible competitive advantage in tenders

Companies that lack consolidated and traceable ESG data risk being excluded from certain tenders. In sectors such as construction, contractors now require clear and structured evidence related to greenhouse gas emissions, health and safety, waste management and responsible procurement.

In fact, organizations that implement a plan led by the finance department quickly improve their competitive positioning. In tenders, proof is much more convincing than intentions.

ESG: A governance tool above all

In a context of market uncertainty and transformation, it is more important than ever to leverage ESG indicators to make the best decisions and thereby secure your growth.

When harnessed effectively, ESG data becomes a strategic accelerator. The CFO is instrumental in this process.

Personalized support enables you to make a diagnosis, initiate a process to organize existing proof and make it verifiable and traceable, and develop a strategic plan with short- and medium-term timelines to boost your competitiveness.es.