Social issues are becoming a higher priority on the business agenda. This is, in part, due to growing recognition of inequality as a systemic risk to the resilience of business operations, value chains and business models. New due diligence regulations and reporting standards are solidifying what is expected of companies.
CFOs have an evolving, but critical, role to play in communicating corporate social performance, serving as the link between a company’s impacts and its financial performance. CFOs are also tasked with engaging with investors, regulators and standard setters in guiding and implementing how the “S” is measured and evaluated internally and by external stakeholders.
Prepared together with CFOs from across the CFO Network, this primer provides a key starting point for CFOs working to address the emerging demands and challenges, covering both an overview of the what, the who and the how of corporate social performance and key recommendations of improving the measurement of that performance.
The work highlights six action areas for corporates to consider as they examine their social conduct and social outcomes:
- Focus on board and senior leaders’ action to embed commitments into practice and corporate culture
- Consider the quality of risk identification and assessment
- Assess whether actions are driving sustained behavior change
- Set targets and KPIs that meet robust and credible design criteria
- Focus on inequality-related workplace metrics
- Use sentiment or “voice” data to gain insight into stakeholders’ experiences
Pepijn Rijvers, Executive Vice-President of WBCSD’s Redefining Value affirms “CFOs are the key bridge between impact and financial performance. Leading CFOs are the ones who are best equipped to have conversations around their company’s ‘S’ performance and share those perspectives with standard setters and capital markets.”
According to Mark Hodge, Vice President of Shift, “As CFOs respond to demands from lawmakers, standards bodies, investors and other stakeholders, having a simple and shared picture of the essentials of good corporate social performance, and ways to evaluate it, is critical. This primer, grounded in authoritative and enduring international standards, aims to provide clarity for CFOs to use to interrogate their company’s practices and broaden commitment among their peers.”
This body of work is part of WBCSD’s CFO Network which brings together 50 CFOs from across all sectors and geographies – together representing over USD 1.5 trillion in combined revenue and over 3 million employees. CFOs are in a unique position to redefine leadership in business and finance as critical change agents within their businesses and as a critical bridge to the investment community and the financial markets. CFOs, through the CFO Network, come together to redesign financial system architecture, revolutionize capital market engagement and build out key elements of business practice towards sustainable transitions. Members of the CFO Network are collaborating to raise the bar on the “S” in ESG through open discussion and giving input into the global standard-setting processes.
More resources to future-proof businesses are found here: Resources - World Business Council of Sustainable Development.