5 reasons why CFO’s are in the lead of making impact

Werner Schouten is director of the Impact Economy Foundation and took the initiative of the Chief Value Officer of the Year Award. In this article, Werner shares 5 key reasons why impact-driven CFOs are essential to accelerate and lead the impact performance of organisations. 

Impact-driven CFO’s are pivotal players in driving impact management within organisations. here are 5 reasons why the CFO is key for steering on impact:

1. CFO’s are in the lead of the euros CFOs control the purse strings and are responsible for financial stewardship in their organisation. This position enables them to allocate resources effectively to areas that optimise societal returns. 

2. The toolbox of the CFO  The CFO and the finance unit have important tools at their disposal for not only financial measurement but also impact measurement and management, such as risk-return analyses and forecasting. From their position, CFOs can lead the shift from: (i) financial accounting to impact accounting; (ii) business case to value case; (iii) discounted cash flow modelling to discounted value flow modelling.  

3. There is great power in numbers – CFOs have a deep understanding of performance metrics and the systems used to track them. As impact management involves setting, monitoring, and reporting on key impact metrics related to social, human, and natural value, CFOs are well-equipped to integrate these into the existing financial reporting and control frameworks.  

4. Integrated view on value creation– Effective impact management requires an integrated view of value creation, understanding the interrelation between societal impact and financial value creation. The CFO is in the position to have the unique overview of both the financial and impact sides of the business, ensuring a holistic view of performance that encompasses both financial and non-financial impacts.  

5. Leading investor relations  CFOs, who often lead investor relations, are pivotal in communicating the company’s impact strategy, performance, and outlook to investors and stakeholders, influencing perceptions and securing support for sustainability initiatives.

These factors position CFOs uniquely to lead and shape impact management strategies that are increasingly critical to a company’s long-term success and sustainability.

CFO’s can now be nominated for the Chief Value Officer of the year Award 2024.

The Chief Value Officer of the Year Award is an initiative of the Impact Economy Foundation.