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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.

CFOs looking toward 2010 anticipate positive increases in a number of areas. Key areas of expected increases include:

• Net earnings expected to rise by 22 percent (more than double anticipated Q3 mean increase of 11%)
• Revenue anticipated to grow by 10 percent
• Capital spending expected to grow by 8.9% (compared with an increase of 1.1% in Q3)
• Technology spending anticipated to increase by 6.1 percent
• Inventory anticipated to increase by 2.5 percent (compared with Q3, where CFOs predicted reductions of -1.9%)
• Hiring expected to grow by 2.9 percent (up from 1.7% in Q3)
• Price of products expected to grow by 1.13 percent (up from the Q3 projected increase of 0.7%)

When CFOs were asked this quarter to identify areas for increases in 2010, marketing and advertising and business acquisitions were also top of mind, with 39 percent of CFOs planning to increase marketing and advertising and 33 percent of CFOs planning increases in business acquisitions. In addition, while 37 percent of CFOs reported they will cutback on executive perks, a small number of respondents remain (4%) who plan to increase executive perks in the coming year.

Efficiency is the New Norm

"The return to a place where CFOs are anticipating increased earnings and revenue provides encouragement that those companies that have endured the downturn are ready to come back strong," said Marie Hollein, CEO and President, Financial Executives International. "As far as the new normal is concerned, efficiency is the name of the game."

When asked what their organizations would continue to do as they begin to emerge from the recession, nearly nine out of ten CFOs reported that they would continue process efficiencies put into place during the downturn.

Two-thirds (66%) said they will continue technological efficiencies, and one-third (34%) plan to continue the restructuring of their business.

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

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%)
  

promoting incentives and initiatives encouraging customers to be "greener" (21%).

Least popular initiatives were reduction of greenhouse gas emissions from factories and plants (6%), and supporting legislation on environmental issues (7%).

Support of Environmental Legislation is Split

While few are actively supporting legislation on environmental issues, sentiment toward governmental regulation of environmental responsibility is split among CFOs.

49% believe regulation a bad response,

37% support government incentives to spur innovation,

14 percent support limits on emissions,

9 percent support cap and trade and other financial incentives.

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. 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.

How can we strengthen our democracy and promote efficiency and effectiveness by making government more transparent, participatory, and collaborative?

Participate!

Open Government Dialogue is a website by the National Academy of Public Administration that opens idea contribution to the public.  Read...and share your ideas at: http://opengov.ideascale.com/

Categories include Transparency, Participation, Collaboration, Capacity Building, and Legal & Policy Challenges.

On January 21st, the President issued the Memorandum on Transparency and Open Government, calling for an unprecedented level of openness in government. In the memorandum, the President outlined three principles for promoting a transparent and open government: transparency, participation, and collaboration. Now, the President is calling on you to help shape how that commitment is fulfilled. This online brainstorming session, open from May 21st to 28th, 2009, will enable the White House to hear your most important ideas relating to open government.

This platform allows you to submit ideas, discuss and refine others' ideas, and vote the best ones to the top. We are seeking innovative approaches to policy, specific project suggestions, government-wide or agency-specific instructions, and any relevant examples and stories relating to law, policy, technology, culture, or practice. The National Academy of Public Administration, a Congressionally chartered, non-profit, non-partisan institution, is hosting this brainstorming session on behalf of the White House.