Sustainability and the CFO: Standard Chartered Bank Perspectives
Presentation by Simon Connell, Global Head of Sustainability Strategy & Subhradeep Mohanty, Regional CFO, Africa & Middle East|
IFAC’s Professional Accountants in Business (PAIB) Advisory Group has been exploring the role of the CFO in enabling sustainability priorities in an organization. To hear a practical perspective on this, the group was joined at its recent meeting by Subhradeep Mohanty, Regional CFO, Africa & Middle East at Standard Chartered Bank, who shared insights on how the CFO and finance function are critical to enabling sustainable finance and incorporating financial and non-financial information into longer-term plans and monitoring and tracking progress against these.
Subhradeep emphasized the need for common language and awareness around sustainability across the organization, including ensuring specific responsibilities of the various teams are clearly defined. He also highlighted the importance of collaboration and integration among teams. Demonstrating this in practice, Subhradeep also invited his colleague, Simon Connell, Global Head of Sustainability Strategy to first share insights into how Standard Chartered is integrating sustainability across the bank.
With a bold ambition to be the world’s most sustainable and responsible bank, Standard Chartered Bank is focused on three areas where it can make a strong contribution through its business model:
For Standard Chartered, sustainability goes beyond reporting frameworks. It is a core priority within the bank’s corporate strategy, influencing how it makes decisions, identifies opportunities, and manages risks across its:
By integrating sustainability across the organization, the bank aims to ensure a common understanding of its objectives and how they are trying to measure outcomes, so that collectively, the bank can deliver sustainable prosperity and uphold its brand promise to be ‘here for good.’
Standard Chartered has a bank-wide scorecard, that spans their three sustainability pillars and sets out their sustainability aspirations with targets and timelines aligned to their business strategy and the UN Sustainable Development Goals (SDGs). These aspirations include a commitment to net zero from its financed emissions by 2050 and in its own operations by 2030. The bank has also committed to mobilizing $35 billion (USD) towards clean technology between 2020 – 2024, already mobilizing $18.4 billion of that in 2020 alone. The bank is also measuring its wider supply chain emissions to help manage and reduce its scope 3 emissions and has a rolling program of carbon credits or offsets as a means of carbon pricing. Selected sustainability aspirations form 10% of the bank’s group scorecard for 2021, driving accountability and incentives across the bank. In addition, these measures are linked to a long-term incentives plan for the Group Chief Executive and Group Chief Financial Officer.
All of this is overseen by a cross-group sustainability forum, chaired by the Group Head of Conduct, Financial Crime and Compliance, with representatives from every business function across the bank. This ensures that across functions there is appropriate allocation of resources to deliver sustainability targets, an equivalent level of ambition and shared accountability.
In the context of the fast-moving sustainability reporting space, characterized by various voluntary initiatives and no alignment around one global approach, Standard Chartered strives to both understand and inform market practice, with the ultimate aim to produce comparable and standardized information that enables decision making by investors and other stakeholders.
Their reporting approach for 2021 focuses on six frameworks, mapping over 1,400 data points from key indices and analysts, and voluntary and regulatory reporting frameworks – all culminating in a reporting suite of six publications: Annual report and accounts, modern slavery statement, sustainability summary, task force on climate-related financial disclosure, SASB-alignment index, and UN PRB self-assessment.
Subhradeep Mohanty outlined some examples of CFO considerations to enable sustainable finance, categorized into two areas - catalyzing and stewarding the organization, and owning operational delivery of requirements.
Catalyzing and stewarding the organization
Owning operational delivery of requirements
The insights shared during this presentation helped inform a discussion with the PAIB Advisory Group on how CFO and finance function roles are becoming more strategic, shifting from “business partnering” to “value partnering”. The group identified key ways in which the CFO and finance function can contribute in value partnering roles. See the article: CFOs and Finance Functions – from business partnering to value partnering.