Why being sustainable as an organization is a key concern for CFOs
In recent years, corporate sustainability efforts have become an important and unavoidable concern for finance executives. Jon Chorley has seen this trajectory from a unique vantage point, holding dual positions as Oracle’s chief sustainability officer and vice president of product strategy for supply chain and manufacturing.
As the guest on Oracle’s General Ledger podcast, Chorley talked with Kimberly Ellison-Taylor, CEO of KET Solutions, about how his two (seemingly diverse) interests have become inextricably linked in the modern business landscape.
“I personally find that a tremendous confluence of factors. A lot of things that affect sustainability also impact supply chains, and vice versa,” Chorley says. “There's no question, it's going to change the shape of all the things that we have to do.”
Using technology to deliver more-efficient supply chains can both streamline business processes and lessen environmental impact. But today, a company’s dedication to environmental stewardship is a big concern for the CFO’s office as well.
CFOs: Don’t discount sustainability
Chorley suggests thinking about sustainability as a risk component—one that threatens brand damage, higher insurance rates, and a looming toll from regulators.
As governments press toward a zero-carbon economy, there will be an enormous cost to businesses that fall behind on pollution mandates and societal standards. That’s why today we see so many large corporations transitioning parts of their businesses to respond better to new economic circumstances driven by climate change, he says.
There’s also the matter of reporting. Of course, it’s standard practice to thoroughly report financial metrics, but with the emergence of corporate social responsibility (CSR) reports, eventually a similar standard will govern disclosures on sustainable business practices.
“And that, obviously, is going to impact financial organizations most directly,” Chorley says. “They'll probably be held accountable or have to respond to those additional reporting requirements.”
Finally, for companies competing for talent, especially younger employees who are extremely concerned about climate change, a poor environmental record is a recruiting liability.
The first rule of sustainability
These concerns aren’t the same for every finance executive; they are highly dependent on the nature of their business, supply chain issues, and economic factors in their industry. For that reason, every company must find the approach that suits its goals best.
“I often say the first rule of sustainability for a business is to stay in business,” Chorley said. No one benefits from measures that ultimately undermine a company’s ability to be successful.
But Oracle can offer an example of a company that’s extremely focused on business outcomes taking a leading role in navigating the global shift to a greener future.
Fifteen years ago, when Chorley was exclusively a supply chain product manager, it became “pretty clear that sustainability and environmental factors were going to be an important consideration in Oracle and in all businesses,” he says. “It was something that we had to respond to.”
So Chorley assembled a small group within Oracle to start thinking about environmental issues in a way that was beneficial to the larger business, sharpening the company’s focus on being a responsible corporate citizen and getting the word out on its achievements.
That work has led to Oracle recently committing to the ambitious goal of powering all its data centers, all of the Oracle Cloud Infrastructure, as well as its office facilities, entirely with renewable energy by 2025. Oracle has also committed to being net zero in carbon dioxide emissions by 2050.
“Whenever we look at these issues, there's always a financial component to it, as indeed, there should be,” Chorley says.
Author: Joseph Tsidulko