Pressure to implement and report on organisation-wide ESG programmes has intensified dramatically for CFOs, with three in five indicating a substantial increase in the focus and frequency of reporting on related issues.
That’s according to Protiviti’s latest Global Finance Trends Survey, which found ESG metrics and measurement have skyrocketed to the top of the priority list for finance leaders – up from 11th last year.
In fact, 57% of publicly held and 40% of privately held companies report that measuring and reporting ESG risks and issues has become part of their finance team’s role over the past 12 months.
“While the term ‘ESG’ has become a hot button issue for some, stakeholder demands and regulatory reporting requirements aren’t going away,” says Christopher Wright, Global Leader for the Business Performance Improvement Solution at Protiviti. “This is leading CFOs and finance leaders to adapt as the ESG reporting landscape continues to evolve quickly, with priorities differing vastly across industries and geographies.
“Along with the need for finance leaders to meet ESG-related reporting demands globally, our survey finds the underlying issues that ESG commitments strive to address will continue to command the attention of finance leaders and organisations over the next 12 months and beyond.”
Organisations preparing for regulatory requirements
CFOs and finance leaders are currently preparing for a global wave of ESG-related regulatory requirements.
These include the already-enacted Corporate Sustainability Reporting Directive (CSRD) in the European Union, as well as the SEC’s anticipated climate impact reporting requirements for public reporting companies in the US.
As the magnitude of these new requirements comes into focus, finance teams are doing what they can to prepare. More than half (52%) of private organisations and almost two-thirds (62%) of public organisations consider themselves ready for new required ESG disclosures, according to Protiviti.
The global consulting firm’s survey of 900 global finance leaders also finds the impact of inflation is weighing heavily on finance teams, rising from sixth last year to become the second-biggest priority in 2023.
The top 10 priorities are as follows:
- ESG metrics and measurement
- Impact of inflation
- Financial planning and analysis
- Profitability reporting and analysis
- Security and privacy of data
- Strategic planning
- Enhanced data analytics
- National tax changes
- Cloud-based applications
- Routine reporting and closing activities
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