3 finance hacks for smashing corporate climate goals

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TLDR: CFOs play a crucial role in driving sustainability performance in organizations. They can implement three finance strategies that have a significant impact on meeting climate goals without incurring additional costs:

  • Use treasury funds to finance the net-zero transition: Corporations hold trillions of dollars in cash and liquid securities, and when deposited in a bank, the bank uses the cash to make loans to other companies. CFOs can ensure these funds are used for financing sustainable projects or energy transition activities.
  • Refresh retirement plans: Financing emissions associated with employer-run retirement plans are not typically included in carbon footprint reporting. By selecting sustainable funds and investment options in these plans, CFOs can align with climate goals and shift capital toward sustainable finance activities.
  • Invest insurance premiums sustainably: Insurers hold large investments in fossil fuels, but CFOs can join initiatives like “Premiums for the Planet” to move their insurance coverage to climate-conscious brokers. This encourages insurers to invest premiums in climate transition projects and limit financing of fossil fuel activities.

CFOs are crucial in aligning business practices with sustainability goals, reporting on sustainability risks, and developing climate transition plans. They have the power to make a significant impact on sustainability performance at little to no extra cost. By implementing these finance strategies, organizations can contribute to a more sustainable future while meeting their climate goals.

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