How sustainable are our sustainability efforts?
By Claus Aagaard, Chief Financial Officer, Mars, Incorporated and member of the A4S CFO Leadership Network
As a CFO, I’m focused on what I call holistic value creation driven by sustainable growth, societal impact and transforming our business. Of course, performance management, compliance, governance and controls are still important. But increasingly, our measures of performance at Mars – where I’ve worked for the past 18 years – include non-financial metrics.
A decade ago, a CFO might have been the cynic in a conversation about investment in sustainability initiatives, without an immediate ROI. But today, the sentiment is different and sustainability investment must be an integral part of a company’s growth, investment and value creation strategy. This calls on the Finance community to influence and generate insights to help explain the value these initiatives bring to our society, and our business’ ability to thrive in the long-term.
That’s why I’m delighted that Mars is joining The Prince's Accounting for Sustainability Project (A4S), where we will explore the role of finance in making sustainable business, a business-as-usual approach.
While Mars is a family-run business with the ability of thinking in generations, not quarters, our lingua franca has always been our values. We are not uniquely qualified to look at our business performance and decision making through a sustainability lens. The call to action for any business that wants to be resilient and relevant in today’s world is to widen the parameters of success and ensure that today’s choices are not borrowing from its long-term future.
At Mars, our Sustainable in a Generation Plan reflects choices that benefit our business, society and the environment. For example, our ambition to reduce GHG emissions across our value chain by 27% by 2025 (and 67% by 2050). Meanwhile, in our direct operations, we’ve upgraded our science-based target for climate action with a commitment to limit global temperature rise to 1.5 degree Celsius, in response to the IPCC’s recommendations.
We’re already capitalizing on the cost savings of clean technology and renewable energy, just two years since launching our plan. Over the longer term, we’re reshaping the way we buy our raw materials, most of which are sourced from small holder farms, to make sure that our procurement practices encourage sustainable farming and improve the working lives of one million people in our value chain.
We’re not alone in our efforts. Businesses, such as those participating in the A4S CFO Leadership Network this week, have adopted purpose-led strategies. It is no longer siloed to social responsibility executives – purpose is a financial incentive, which is why it needs even greater participation and buy-in from CFOs and finance experts.
We can’t rest the business case for sustainability on financials alone. It’s not about putting purpose before profit, or profit before purpose; business needs to pursue both.
As finance experts, we have the skills and knowledge to demonstrate the value creation that comes from sustainability efforts, to articulate progress beyond mere profit. We must recognize the communities in which we operate, those that make up our global supply chains, regulators, consumer-citizens and employees, and our ability to operate profitably depends on them.
I’m looking forward to coming together with my finance colleagues [this week] to challenge ourselves on all of these topics.