Why financial reporting rigor is vital to ESG

Cisco’s stated purpose is to make the world a better place. So how does the company’s first environmental, social and governance (ESG) Controller make sure that happens?

In a fascinating and wide-ranging discussion, they cover what the rigor of finance can bring to ESG, and the importance of finance’s unique ability to bring accountability, governance, control systems and formal processes to the ESG table. Together, they unpack the challenges of getting to net zero across scope 1, 2 and 3 by 2040, and the particular challenges of scope 3.

Ciara talks about her role — how ESG has become so much bigger than anyone anticipated and its challenges. How do you prepare for the yet unspecified SEC regulations coming down the track? How do you best support existing ESG activity and the passion of colleagues? What about risk? And how is it even possible to collaborate across so many functions? 

Prat also speaks to that point and the huge opportunity that finance has to work across the organization and bring all the functions together to drive accountabilities deeper into the organization. He has a positive message — even though there will be huge changes before 2040, with the right frameworks in place, finance can provide the organization with the information it needs to make the best decisions now and in the future.

Key takeaways:

• The rigor of financial reporting brings huge benefits to ESG.
• You need to achieve a balance when applying financial rigor to the work of people who have been reporting voluntarily.
• Talk to your peers, reach out and share what you have discovered — it’s a fun journey.
• Be humble, listen and learn.
• If you haven’t already started your ESG journey, start now.
• Major innovative breakthroughs may not happen in one-to-three- year timeframes.

For your convenience, full text transcript of this podcast is also available. Read the transcript.