Good morning,
Stewardship of sustainability might not have been in a CFO’s job description five years ago. But as companies await the final U.S. Securities and Exchange Commission rules on climate disclosures, aligning sustainability and financial priorities is top of mind.
“I think they're inherently linked,” says Debbie Clifford, CFO at Autodesk, a multinational corporation that develops 3D design software in engineering, architecture, construction, and digital entertainment. “I’m seeing more of a movement where sustainability-type organizations are reporting to the CFO. Although, when I talk to my CFO counterparts, I wouldn't say at this point, anecdotally, that a majority of them have that structure. But they're not surprised that this is the organization structure that we've adopted at Autodesk.”
Clifford leads Autodesk’s sustainability organization, with Joe Speicher, VP of ESG and impact, reporting to her, she says. “For us, it's not just about sustainability,” she explains. “It's also about our entire ESG [environmental, social, governance] strategy.” This includes addressing how the company can improve operations and drive more sustainable outcomes for customers and in the industries the company serves, she says.
Billy Scherba, senior director of regulated reporting solutions at Persefoni, a climate management and accounting platform provider, is seeing more CFO involvement in sustainability and ESG. “Regulated reporting of financially relevant data is undeniably within the CFOs remit,” Scherba says. ESG data is becoming increasingly financially relevant, so CFOs are paying more attention, he says. “With many of our clients, we have built an understanding of how the process needs to change with controllers or SEC reporting leads, then worked with the CFO to approve and finance the project.” He continues, “We have seen a considerable increase in SEC reporting companies reaching out to begin building an ESG data strategy.”
Trust and transparency
Clifford is “personally really passionate” about sustainability, she told me. She was at Autodesk for almost 14 years in financial leadership roles but left in 2019 to become CFO at SurveyMonkey. Clifford returned as CFO in 2021. One of the main reasons she rejoined Autodesk was “because of the impact that I think the company is going to have on the planet, and I'm not just trying to wax poetic,” she says.
“Our software drives digitization of processes in industries that are incredibly wasteful on the planet, like architecture, engineering, construction, or factory manufacturing,” Clifford says.
An example? “In my case, we did a remodel of our house,” Clifford explains. “There were multiple times when they would bring raw materials to the site and realize that the raw materials didn't fit the original design that had been created months earlier. They only needed half of it, for example. And the rest of it, unless it's repurposed, becomes waste immediately. But having software digitizes the end-to-end workflow and reduces that waste.” If you can see where you might have a clash in the design on the worksite, using cloud-enabled technology on a device like an iPad, an architect can adjust the plan and have it reach everyone on the worksite, she says.
In 2021, Autodesk issued its first sustainability bond offering, totaling $1 billion. “We were basically looking at how we can deploy capital to drive our sustainability strategy forward,” Clifford says. An example? Autodesk software engineered “Europe's first smart canal,” according to the company. Scottish Canals, Glasgow City Council, and Scottish Water came together to create the Glasgow Integrated Water Management System, and used the company’s tools to turn North Glasgow into a “sponge city.”
Having a link between the sustainability and finance teams has been essential, Clifford says. “We're not entirely there, but we feel like we are well around the racetrack in trying to be ready for when the SEC comes out with its formal disclosure requirements,” she says. “The importance of having that standardization is so that investors can have trust and transparency.” And, “one of the big jobs" of a CFO is engaging with investors and telling the story of the company, she says.
Sheryl Estrada
sheryl.estrada@fortune.com
