CFOs Meet and Declare Environmental Performance a Top Priority

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At the first-ever executive conference on sustainable and environmentally sound business practices for finance executives, presented in New York by CFO magazine's events division, chief financial officers said that "green business" has become a source of business innovation, operational improvement, and new sources of revenue.

Chief financial officers say that "green business" has reached an inflection point. It's no longer simply a brand building or risk management tool. It has become a source of business innovation, operational improvement, and new sources of revenue, said senior finance executives at the first-ever executive conference on sustainable and environmentally sound business practices for finance executives.

"Sustainability has moved from risk mitigation to a business and revenue opportunity," said Mark Newton of Dell Computer. He and other executives from large U.S. companies--including Caterpillar, Coca-Cola, Office Depot, and Jones Lang LaSalle--argued for environmentally sustainable business practices as a source of business value and presented both their progress and their aspirations at "CFO2: Bottom Line Impacts and Stakeholder Buy-in," an interactive session attended by more than 60 finance leaders in New York City. The conference was produced by CFO Conferences, the executive education arm of CFO Publishing, which produces CFO magazine.

Through the day-long session of discussion among finance executives and sustainability experts, two broad themes emerged:

  • Companies that embrace green business practices realize business benefits quickly--but the corporate finance function must contribute both to decision making and to integrating the information flowing from sustainability initiatives into their broader reporting and regulatory compliance activities.

Michael Monahan, CFO of Pitney Bowes, said "Our environmental stewardship is integral to the way we do business. It is not an aside, or an add-on; it is core to the way we behave," and he cited examples of how the company's sustainability efforts have improved its product and service offerings to customers, the profitability of core business operations, and its leadership position in its industry.

David Burritt, CFO of Caterpillar, said his company's focus on sustainability efforts--which include redesigning its product lines to become more energy efficient, expansion of its remanufacturing business, and broad adoption of new technology in both its internal processes and within its products--have delivered measurable improvements in business operations for the company and its customers. He called on his peers in the finance function to understand sustainability as a business opportunity, not as an inconvenience or a drag on the bottom line. But doing so requires the finance function to develop consistent measurements for sustainability across its operations and to "find the value in sustainable business and then drive action across the business."

Lauralee Martin, CFO of Jones Lang LaSalle, cited data from CFO Research Services showing that customers and senior operating executives are attuned to the benefits to be gained from green business initiatives. Finance executives and investors, however, are only now coming to understand the value implications of rigorous environmental performance management.

A formal cap-and-trade system for carbon emissions in the U.S. is all but inevitable in the next two years, said Fred Krupp, president of the Environmental Defense Fund and author of Earth: the Sequel - The Race to Reinvent Energy and Stop Global Warming. Each of the three leading presidential candidates endorses such a system and several carbon trading exchanges have emerged in anticipation of new regulatory requirements. And forward-looking finance organizations in the U.S. are participating in voluntary carbon trading markets in an effort to gain experience in this embryonic market, to influence the details of the regulatory regimen, and to bring market discipline to their own operations.

Krupp argued that a cap-and-trade system for carbon offers an efficient system to address greenhouse gases, largely because it chooses a broad structure for limiting emissions without heavy handed, micromanagement of business processes. A cap-and-trade system will unleash technological and commercial innovation of a broad market without "choosing the winners."

Mary Driscoll, president and editorial director of CFO Conferences and Research, said, "This conference has identified a watershed for both the green business movement and for the corporate finance function. Customers, investors, and regulators are calling for companies to strengthen their environmental stewardship and to do so openly, candidly, and transparently. Clearly the finance function is embracing this mandate and adding environmental oversight to its broader agenda of ensuring high performance and generating shareholder value. We're delighted to help lead this dialogue among finance executives, companies, and other stakeholders.

About CFO Publishing and CFO magazine

CFO Publishing is an award-winning Economist Group business. We reach an international audience of over 579,000 corporate decision makers online, in print, and through specialized events, conferences and research.

Our global portfolio of magazines includes CFO, CFO Asia, CFO Europe, an in-language edition, CFO China, and the new CFO Russia. This vibrant relationship with our decision-maker audience extends online at CFO.com - which attracts over 370,000 readers each month - as well as through CFO Research Services and CFO Conferences.

For more information, visit http://www.cfo.com

About CFO Conferences

CFO Conferences produces educational and networking conferences and exhibitions for senior finance executives. Speakers include the CFOs of major corporations as well as thought leaders in management, strategy, and innovation. Attendees are primarily CFOs, VPs of Finance, and Controllers from large and mid-size U.S. corporations.
For more information, visit: http://www.cfoconferences.com

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Randall Byrn

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