We need to bridge the green skills gap in finance
CFOs and finance teams are becoming a core part of decision-making for planning and executing corporate sustainability strategies.
This is due to the greater onus on linking sustainability not just to an organisation’s decarbonisation progress, but also to addressing commercial priorities and mitigating financial and reputational risks.
But the skills needed to address this are not always there, including at c-suite and senior leadership level. Therefore upskilling in this area is more important than ever.
According to PwC, focussing on climate is a priority for investors, as nearly two-thirds told its global investor survey 2022 that increasing investment returns was the significant motivator for them.
As organisations battle for competitive advantage, a link between sustainability and financial success is becoming increasing clear. However, on a global scale, there still seems to be a lack of sustainability integration from the financial services sector.
A recent survey of the financial services sector from the Chartered Banker Institute found that only 8 per cent believe their organisation is prepared for the future requirements in green and sustainable finance.
PwC highlighted last year that there is an increase in demand for green finance jobs, but significant regional disparities still exist across the UK.
A lack of finance leaders attending COP29 has also been called into question.
This can also be seen at an organisational level. In fact, our recent study shows a disparity between businesses’ level of confidence and actual ability to achieve commercially competitive sustainability plans.
In order to address these challenges, upskilling and training opportunities must be provided to strengthen finance leaders’ and c-suite decision-makers’ roles and impact in driving sustainability forward.
Recognising the skills required
An integral intersection between sustainability and finance must be upheld and CFOs have the ability to take sustainable initiatives beyond ethical imperatives.
Notably, CFOs slightly surpass heads of sustainability as the final authority on such decisions, holding 28 per cent versus 24 per cent of the final say respectively.
This dynamic is likely tied to CFOs’ core competencies, which translate to assessing the costs and returns on sustainability investments, evaluating the viability of renewable technologies, incorporating sustainability into broader financial modelling and reporting, and ensuring alignment with long-term strategic objectives.
Training opportunities such as continuing professional development modules, industry experience, mentorship, and inviting guest experts are great pathways for professionals to learn new skills on the job.
By directing resources toward sustainable practices, businesses can safeguard their operations, boost their brand reputation, and seize new market opportunities, effectively future-proofing their enterprises through transparent and accurate reporting and communication.
However, a recent survey of the financial services sector from the Chartered Banker Institute found that only 8 per cent believe their organisation is prepared for the future requirements in green and sustainable finance.
This highlights the need to ensure finance professionals are equipped with the skills and knowledge to apply sustainability legislation, trends, and industry requirements to business and financial planning to maximise commercial benefits.
Bridging the skills gap
Considering that climate planning and reporting is no longer considered a nice-to-have but a core business necessity, existing guidance and frameworks such as The Transition Plan Taskforce’s Financial Disclosure Framework can be a great starting point for identifying skills gaps.
Further, such frameworks can then provide a sense of direction for finance teams and senior leadership to get themselves acquainted with integrating sustainability within existing business models.
As geopolitical triggers impacting energy volatility will also change skills requirements from time to time, professional bodies and experts need to work in collaboration with businesses and the government to ensure high-quality and up-to-date training programmes are being developed, tailored to the needs of every organisation.
Training opportunities such as continuing professional development modules, industry experience, mentorship, and inviting guest experts are great pathways for professionals to learn new skills on the job.
Certain financial bodies have already started thinking from this perspective by fostering some important partnerships.
Lloyds Banking Group, for example, have partnered with the Cambridge Institute for Sustainability Leadership to provide sustainability leadership for its employees.
Other organisations such as the United Nations Environment Programme Finance Initiative have put together useful resources for finance professionals to understand the alignment of economic performance with sustainable development.
The opportunity cost
Ultimately, finance professionals can no longer think of sustainability as an expense; rather, we must recognise that sustainability can be profitable when done right.
Finance professionals can learn how to leverage sustainability for the benefit of business with the correct training in partnership with experts to not only create positive impact, but also make sustainability a core function of business.
Jonathan Anstey is director of sustainability, EMEA at True
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