CFOs Taking Steps to Be "Greener" but Debate Continues Over Regulation

Global Sustainability

As the global conversation on sustainability heats up, this quarter's survey examined what steps companies are taking to become more environmentally responsible, and why they may be taking them.

• The most frequent "green" action among respondents' companies is reducing energy consumption in company facilities (48%).
  
• This was followed by reducing waste in production and packaging (30%) and promoting incentives and initiatives encouraging customers to be "greener" (21%).
  
• Least popular initiatives were reduction of greenhouse gas emissions from factories and plants (6%),
  
• Supporting legislation on environmental issues (7%)

Spur Innovation, Yes.  Regulate Abuses ... no.

While few are actively supporting legislation on environmental issues, sentiment toward governmental regulation of environmental responsibility is split among CFOs. Though nearly half (49%) believe regulation a bad response, more than one-third (37%) support government incentives to spur innovation, 14 percent support limits on emissions, and 9 percent support cap and trade and other financial incentives.

28% of Companies are Doing NOTHING

Perhaps disappointingly, 28 percent of CFOs indicated that their companies are not taking any actions to make their companies more sustainable. With regard to those companies who are taking actions, the survey revealed a number of motivators.

Cost Efficiencies Main Driver

More than one-third cited cost efficiencies as the main driver, 31 percent refer to personal priorities of their leadership as the cause, 29 percent say enhancement of public perception is the reason, and 24 percent point to a desire to emerge as a committed leader in the industry.

Additional Findings:

Other topics examined in this quarter's survey included International Financial Reporting Standards (IFRS), CFOs' perceptions of Barack Obama's presidency nearly one year after his inauguration, and the impact of the SEC's enhanced disclosures on risk, compensation and corporate governance in annual reports. With regard to IFRS, an overwhelming majority of CFOs (80%) are confident that IFRS will be adopted, but do not know when. CFOs' perceptions of President Obama remain low, with 64 percent reporting their U.S. economic outlook has weakened since he took office.

Full survey results and historical data comparisons are available at www.cfosurveys.com or from Nicole Madison at Nicole.Madison@fd.com. The study is also available online at the Financial Executives Research Foundation bookstore and on the Baruch College home page at www.baruch.cuny.edu.