The third discussion table of the business conference The CFO and the CIO, promoters of the growth of business value, organized by elEconomista.es, deals with the importance of the chief financial officer (CFO) as the protagonist of the environmental, social and corporate strategy (ESG) in the business field. Here, the participants point out, the company must act according to these criteria that allow them to carry out a “much closer and more understandable” communication with their most important and interesting market: financing and investmentforever hand in hand with technology companies in search of the goal of sustainable transition.

Thus and under this pretext, the financial team must have an accurate accounting of financial and non-financial data that allows it to understand and face the necessary efforts in terms of ESG and transmit them to the interested parties, in addition to orchestrating the corporate reporting process on ESG. .

The Deputy Director of Management Control of Fene Energa, Alfonso Ruiz, highlighted the importance of ESG in the energy sector. How would meeting these criteria create value in the finance section of a company? “We have it in our DNA,” he explained flatly. Your company sells green energy, and the development of the strategic plan and milestones, along with tracking this green energy, is key to monthly reporting and financial performance.

Alejandro Roca, Financial Director of Sercotel he explains that he understands financial intrinsic value and purposeful value for society, which is difficult to quantify, as two separate elements. “It is not in our view that ESG always has an impact on value.”

The Country manager of Workday Iberia -more than 15,000 employees-, Adolfo Pellicer, clarifies the importance of the green transition in the world of CEOs, as a cross-cutting issue that is also becoming important in financial management: “it will play an important role in the sustainable transition, with a more or less positive impact on the value “. “We consider the role of the financial director to be relevant in several lines. In the corporate ESG report, where we need to get to the bottom of it and embed it in the corporate processes of the companies”, therefore the financial director is very important because he decides where the funds go. .

Roca explains that, in terms of metrics and standardization of metrics in ESG “they are in a field of fog”. The environmental part is relatively stable, the part of the S there are already differences with respect to the US and in terms of Governance it is more rigid. “There are standardization initiatives, which does not imply that companies stop or choose a different path. The important thing is cultural change, because at some point it will be unsustainable” if the metrics are not addressed. “I am concerned about the metric in the calculation and in the definition to have a comparison and an objective”, explains Roca. “We need some stability and comparability,” she says.

Alfonso ratifies the difficulty when making these comparisons in the metrics, and explains that a key point is to anticipate events. “The key sense is to anticipate what is coming and work in the company as a whole, working not only on the income statement, but also in quantitative and qualitative terms”.

An added and structural value

Pellicer showed according to the certain uncertainty or “fog” in the field of ESG. He retrieved ESG data at a global level, with more and more companies reporting metrics, although he gives more importance to the previous step: before the metric, he says, there is the strategy. “You have to go to the beginning to embed the ESG processes in the company, where the Financial has a lot to say.”

Regarding the challenge to be assumed, which they explain is “tremendous”, companies have to collect their own data and metrics and that of their clients, select certain parameters to choose suppliers… for this, Roca also explains that it is necessary to start with the internally, the company, to develop this process. “The problem with this is that we are going ahead of the legislation,” he explains, also referring to banks or the international arena, where there may be business opportunities. “And the employee asks you for it”, an extra and decisive added value economic factor or career plan.

Ruiz explains the certain difficulty in collecting some metrics, but that it offers an opportunity to make a reporting of ESG. Pellicer also thinks, who clarifies that part of the ESG information are indicators that come from different sources, it is not structured and work must be done to streamline this information, which in turn will make access to this information cheaper once it is done. the structural change “from the core” of the company.

The ESG gap will be reduced once regulation advances, offering new opportunities and facilities in terms of business financing. “If this is cultural, it doesn’t have a department,” it is part of the entire company, explains Roca. In the future, as the compilation progresses, it will have its own budget item. Alfonso, in turn, believes that the exhaustive analysis will improve the financial results of the companies. “It’s a very interesting opportunity,” explains Ruiz, and Pellicer also agrees.

Roca also goes further: the client himself assesses the ESG rating and put a note to the company based on these criteria. “The positive return is in all areas,” explains Ruiz. And at this point Pellicer highlights the importance of going hand in hand with technology companies, acting at the origin of the processes. “There is a great opportunity to evolve the ERP to an agile and modern one like Workday, to introduce changes in hours and for ESG policies to be integrated into the company’s processes in order to obtain that information.”

Closure of Pellicer

After thanking El Economista and the participants, Pellicer highlighted several interesting points of the day. In the first forum, the relationship between the CFO and the CIO, where I would highlight, in addition to the relationship and communication, how “both become a relationship of business partners” to support all the departments where CFOs have to win. weight so that everyone “speaks the same language” in the data.

Startups have agility in the DNA of their financial leadership, even with a lot of manual work that they’ve had to turn around to make strategic work count. In the face of sustainable transformation, the importance of technology is fundamental in order to meet the challenge of transformation.

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J. A. Allen

Author, blogger, freelance writer. Hater of spiders. Drinker of wine. Mother of hellions.