CFOs are highly engaged in their organizations’ decarbonization efforts, notably in the role of steward, strategist, and catalyst. That’s according to a recent survey conducted by Deloitte. The “CFO Signals” study revealed that CFOs anticipate spending nearly 10 hours per month on average on decarbonization issues, and their finance teams to spend 109 hours per month on average. Finance teams need most clarity on methodologies and reporting standards, and relevant data, to meet their organizations’ decarbonization goals. CFOs are primarily using internal cashflows from operational savings to fund decarbonization strategies.
To what degree are you involved in your organization’s decarbonization efforts in the following roles: strategist, catalyst, operator, and steward? Nearly three-quarters (73%) of CFOs said that they are involved or very involved in their organizations’ decarbonization efforts as a strategist. The remainder are not. As a catalyst, 71% noted they are involved or very involved, and 29% are not involved. Less than half (48%) are involved in their organizations’ decarbonization efforts in the operator role, and the remainder are not. As a steward, 83% of CFOs surveyed indicated they are involved or very involved in their organizations’ decarbonization efforts.
How many hours per month do you anticipate spending on decarbonization efforts next year, and how much will your team likely spend? CFOs indicated they plan to spend 9.7 hours on average per month on their organizations’ decarbonization efforts over the next year. They anticipate their finance organization will spend 109.2 hours on average per month on such efforts over the next year.
What are the biggest challenges your enterprise/organization faces in developing and executing a decarbonization strategy, and what are the biggest challenges your finance team faces in delivering on your organization’s decarbonization goals? CFOs’ responses for the two questions frequently overlapped. Comments fell into key categories, such as clarity on measurement/strategy, costs, lack of universal guidance, technology/data capture, stakeholder buy-in, competing priorities, and resources.
What two things do you think your finance organization needs most to meet decarbonization- related requirements, including disclosures? When asked to select two things their finance organization needs most to meet decarbonization-related requirements, 69% of CFOs indicated clarity on methodologies and reporting standards, and 62% chose relevant data. Other needs included new or more advanced technologies, more time, and more people.
Where do you anticipate incurring the most significant costs related to your organization’s decarbonization goals? Half of CFOs who responded said that increased operating and capital expenditures is where they anticipate incurring the most significant costs related to their finance organization’s decarbonization goals. Twenty-eight percent of CFOs who responded said they anticipate incurring the most significant costs in transforming their organizations’ overall business model and value chain while 9% noted carbon offsets, 4% loss of long-term revenue, and 3% costs of
What percentage of annual revenue does your organization intend to spend on decarbonization over the next year? Over half (54%) of the CFOs who responded intend to spend .01% to 1% of their annual revenue on decarbonization over the next year. More than one-quarter (26%) said they plan to spend between 1.1% and 5% of annual revenue. One-fifth indicated zero percent.
What are your organization’s top three ways to fund its decarbonization strategy? Sixty-nine percent of CFOs said they use internal cashflows from operational savings to fund their decarbonization strategy. More than one-third (37%) indicated they reallocate growth capital from carbon-heavy resources, assets, businesses, or product lines. Nearly one-quarter (23%) reported that they seek assistance and grants from government/regulators.
When do you expect your organization to reach net-zero carbon emissions? More than one-quarter (27%) of CFOs indicated their organizations would reach net-zero carbon emissions by 2030, 34% said by 2050, and 3% noted it would be later than 2050. Two percent indicated they had already reached their goal. Meanwhile, 33% reported they do not have a plan.
What metrics do you currently use, or plan to use, to measure the effectiveness of your organization’s decarbonization efforts? Reduction of carbon emissions was the predominant metric that CFOs cited, followed by energy usage and SEC or SASB standards. Thirty-two percent of CFOs said their organizations either do not have a plan to measure the effectiveness of their decarbonization strategy or that their plan is in development.
Looking ahead to 2025, what do you believe will likely have been the most impactful change that your organization—and you and your finance organization—will have made to address decarbonization? Regarding their company’s impact, the majority of CFOs’ comments revolved around better process and materials efficiency, followed by more clean, renewable energy. With respect to their own impact and that of their finance team, CFOs cited building or evaluating business cases for investing in decarbonization; meeting reporting and disclosure standards/requirements; and providing data, KPIs, targets, and reporting on progress toward their organizations’ decarbonization goals.
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