Until 2020, financial events were the primary triggers to systemic crisis in markets across the globe. However, the Covid19 pandemic demonstrated the fragility of current development and growth models, showcasing how quickly a crisis can unravel and transform from a health emergency to an economic, financial and humanitarian crisis too.
Effectively, it underlined the need for governments, enterprises and individuals to revisit their environmental and sustainability quotients. It also emphasized the importance of resilience. Clearly, a lesson that emerged was that companies which integrated sustainability and transparency strategically into their business operations prior to Covid-19 were much more agile in their response to unexpected events. The crisis also provided businesses with a rare opportunity to pause and re-imagine how they could do things differently, going forward.
To discuss how Covid19 has driven home the urgency for sustainable change at the enterprise level, the need to upskill workforces for the digital revolution that is unfolding and other related themes, Forbes India in partnership with the Institute of Management Accountants (IMA) hosted a virtual discussion under the banner of Forbes India CFO Dialogues.
Moderated by Manu Balachandran, Assistant Editor, Forbes India, the panel, which comprised eminent CFOs that are well-placed to lead the response to Covid-19 and create long-term opportunities that culminate in a more sustainable future, included Tarun Satiya, Managing Director, Strategy & Consulting, CFO & Enterprise Value Accenture India; Tejaswini Rajwade, the CFO IBM India South Asia; Manish Dugar, the CFO Mphasis; Daniel Spindler, CFO Siemens Limited and Doreen Remmen, CFO, Institute of Management Accountants (IMA).
Speaking for everyone, Tarun Satiya recalled how the crisis was completely unexpected and tough in terms of its sheer impact on human lives, society, businesses etc. It was heartening, however, to experience the resilience of society, communities, nations and businesses. He believed that an important lesson which emerged was that it is no longer about profit. “People and planet, the other Ps of business, have become important,” he pointed out. “Businesses have sustained themselves for centuries. But now investors have become more vocal about implementation of ESG parameters. When you invest in ESG practices you are preparing for a marathon and not a sprint. So, it makes economic sense to be sustainable today.” He highlighted the need for creative and innovative solutions to cut emissions, waste, etc. as running sustainable businesses is a responsibility and a debt that must be paid to future generations.
Contrary to archaic belief, sustainability does not have to be achieved at the cost of profitability. Manish Dugar opined that it would, in fact, add to enterprise value. “The definition of sustainability has changed. If you are not taking care of the environment, your business cannot be sustainable,” he said.
At another level, in his company’s experience, building long-term partnerships and considering stakeholders as a part of the ecosystem had delivered benefits. “If you have created a sustainable ecosystem, the chances of you giving returns to your stakeholders is higher,” he observed. “The pandemic has shown us what we should and shouldn’t do and clearly demonstrated what adds value, is sustainable and delivers more profit. Organisations that looked at sustainability as an investment have seen better returns.”
Daniel Spindler agreed that sustainability required a long-term view and serious commitment. “Short term profit cannot stand in the way of a sustainability agenda,” he said, adding, “Covid19 has proved the competitive advantage of those who adapt fast. Never before has a disruption shown the need for sustainability.”
Acknowledging that Covid19 was a wake-up call for businesses around the world, Doreen Remmen added, “We learned how totally interconnected we all are. We realised that we are part of a larger ecosystem, comprising supply chains, customers, employees and our companies in the middle of it all. We have had to recalibrate everything.” She noted that people are now paying more attention to what is truly important to them. “Individuals and companies are now more sensitive to the health of the planet and the health of all its people. There is increased awareness and momentum that is driving meaningful change all around the world.” Essentially, the long-term health of the organisation now relies on its impact on the environment, communities and stakeholders.
Tejaswini Rajwade shared her experience at IBM, an enterprise which is committed to environmental leadership every activity. “We are not necessarily just a people business; we try to bring sustainability into our products, services and operations too. We see that we can now leverage cloud, AI, IoT, data analytics, etc., to really get to the next level and build actionable assets. Blockchain is the future and will be a critical factor in global corporate sustainability because it delivers absolute transparency. We can build a very sustainable strategy around resources for us and for the entire ecosystem of our clients and partners.”
Analysts and investors are now increasingly favouring companies with good ESG values. Against that backdrop, the panel went on to discuss actionable solutions that could contribute significantly to sustainability. Tarun Satiya believed that as a CFO, adopting consistent reporting frameworks for sustainable actions, including measuring, reporting, comparing sustainability parameters could help achieve the goals of sustainability and accountability to the environmental as well.
Manish Dugar opined that the CFO, being the architect of growth, can clearly showcase the benefits of sustainability on the balance sheet. This would drive the message home for companies, stakeholders and shareholders. In fact, he went on to suggest that CFOs could be risk averse or they could turn these risks into opportunities.
At a more micro level, Daniel Spindler emphasised that it was important to have an empathetic view towards internal workings of organisations and pay more attention to the well-being of people. He believed that the entire organisation needed to move towards common goals in the post pandemic world.
Tejaswini Rajwade agreed that CFOs typically did not look at HR-centric roles, but now empathy is playing a bigger role and would become a game changer for enterprises. She suggested that corporates need to rethink education and job roles to prepare the younger generation for the future.
A majority of the panel also agreed that it was important to focus on the youth, which represents the future of organisations. In the age of cancel culture, the brand and reputation of businesses is in the hands of millennials and without sustainability at the core, it would be difficult to attract good, new talent or customers.
Doreen Remmen observed that young people adopt sustainability more instinctively, so while the Board and C-Suite need to push a sustainability agenda, involving younger employees at the low- and mid-levels of the organisation could drive the change more effectively.
The discussion culminated with a consensus that if CFOs reoriented their thinking away from shorter term goals and maximizing returns here and now, towards longer term objectives of creating sustainable practices, it would result in a culture of investment that would augur well for the company, its employees, customers and stakeholder, and society and the world at large.The pages slugged ‘Brand Connect’ are equivalent to advertisements and are not written and produced by Forbes India journalists.