It’s crunch time for CFOs when it comes to ESG reporting
CFOs need to get serious about ESG—environmental, social, and corporate governance.
The proposed climate-risk disclosure rules by the U.S. Securities and Exchange Commission would require compliance as soon as fiscal 2023 for the largest public companies.
“CFOs were coming to us saying that they’re now responsible for ESG reporting,” Pete Schlampp, chief strategy officer at Workday, told me. “Internally, we sat down and said, we’ve got all of this important data here inside Workday, and we wanted to be able to help our customers make an impact faster,” Schlampp, says. At the onset of the pandemic, the company “established a team that can help us develop solutions more rapidly,” he says.
Workday (Nasdaq: WDAY), a global provider of enterprise cloud applications for finance and human resources, announced this week two new solutions for customers: social reporting for ESG and supplier risk and sustainability. Workday, which partners with Fortune on CFO Daily, gave me a peek at the new offerings, which are built on top of the products Workday already offers:
Social reporting for ESG is for factors such as workforce composition, organizational health, and diversity. “All of the data is typically inside Workday but in different parts,” Schlampp explains. “It could be inside core human capital management, or Peakon Employee Voice data, or People Analytics, including the valuing inclusion, belonging and equity [VIBE] Index. What we wanted to do is package all of these different pieces together into a single set of dashboards that CFOs could quickly have access to.”
The supplier risk and sustainability solution will streamline the collection of key ESG and risk data from suppliers that exist inside Workday’s platform by using the company’s Financial Management and Strategic Sourcing applications. “You might also have some external sources as well,” Schlampp says. The Prism Analytics application “allows you to bring in data that’s not sitting inside Workday, collect it with existing data and have it on the same dashboards,” he says. Accelerate2zero, built by partner Deloitte into Workday Adaptive Planning, allows customers to model and report scope 1, 2, and 3 emissions, Schlampp says. (Scope 1 and Scope 2 greenhouse gas emissions result directly or indirectly from facilities owned or activities controlled by the reporting company, while Scope 3 emissions aren’t produced directly from the reporting company but from the activities of its value chain or suppliers.)
All three are set to be under scrutiny by the SEC. The agency voted on March 21 to propose the mandatory climate-risk disclosures. Before the SEC can finalize the mandate, the public has up to 60 days to comment, which means a final decision may come in late May.
Joel von Ranson, a partner and global functional practice leader at Spencer Stuart, recently told me that some areas CEOs and boards are putting the most pressure on CFOs are ESG and data analytics. “Companies want CFOs to measure ESG, talk to investors about it, and perhaps try to turn it into a source of competitive advantage,” von Ranson said. And they’re also “looking for CFOs to be very savvy about data and analytics, finding ways to use analytics more broadly and extensively. It’s increasingly a critical skill set that companies want CFOs to have.”
ESG reporting will most likely evolve over the years as federal guidelines are tweaked or companies change. Schlampp said the new solutions are intended to be modified. “As we go forward, we will definitely be building on top of these solutions as well.”
And speaking of strategy, Schlampp began his role as chief strategy officer in October, after serving in leadership roles at Workday for more than five years. He collaborates with CFO Barbara Larson and other department leaders on shaping the company’s course, he says.
“I like to say that my job is to illuminate the path to Workday’s future,” Schlampp says. A future that no doubt includes a whole lot of focus on E, S & G.
CFA Institute, a global association of investment professionals, has released its annual Investor Trust Study, which measures trust levels in financial services among retail and institutional investors. In 2022, trust in financial services has increased to 60% among retail investors and 86% among institutional investors. The five factors driving higher trust in financial services include strong market performance, fee compression, tech-enabled transparency, greater access to markets, and new personalized products, according to the study. The findings are based on a survey of 3,588 retail investors and 976 institutional investors in 15 markets globally.
In case you missed it, here’s what was featured in CFO Daily this week:
Atanas H. Atanasov was named EVP and CFO at Lummus Technology. Atanasov will succeed John Albanese, who is stepping down as CFO. Atanasov joins Lummus after previously serving as EVP, CFO and treasurer at Kraton Corporation. Prior to Kraton, he was CFO of Empire Petroleum Partners, LLC and CFO of NGL Energy Partners. He also spent nine years with GE Capital in various finance roles of increasing importance and responsibility.
Brian Daum was named CFO at Babel Street, an open-source intelligence SaaS company. Daum has 20 years of experience. He joins Babel Street from BlackSky, a geospatial intelligence SaaS business, where he led the company through its NYSE initial public offering. Prior to BlackSky, Daum served in CFO and COO positions at multiple technology companies, including MotionSoft, Savi Technology and Centrifuge Systems.
Natasha Fernandes was promoted to CFO at IMAX Corporation (NYSE: IMAX), effective May 1. Fernandes succeeds Joseph Sparacio. Fernandes has been with the company for 15 years. Prior to the role of deputy financial officer in 2021, she served as corporate treasurer since 2018. Earlier, she held positions including assistant controller and director of financial reporting. Prior to joining IMAX, Fernandes was an audit manager at Deloitte.
Kelly Gold was promoted to CFO at CAMP4 Therapeutics, a biotechnology company. Gold currently serves as CAMP4’s chief business officer and SVP of finance. She joined CAMP4 in 2017. Gold previously held various roles in corporate finance and business planning at Biogen. Prior to Biogen, she worked in both the health care and Latin American investment banking groups at Deutsche Bank.
Sonia Jain was named CFO at Convoy, a digital freight network, effective April 25. Jain will assume the role from Convoy’s president and COO Mark Okerstrom, who has served as acting CFO since December 2020. Jain joins Convoy from Cars.com (NYSE: CARS), where she was CFO. Prior to joining Cars.com, Jain spent 10 years with Redbox/Outerwall and prior to that spent several years at both Morgan Stanley and McKinsey & Company.
Kristine Newman was promoted to CFO at McCarthy Holdings, Inc., a 100% employee-owned construction company. Newman replaces retiring CFO Doug Audiffred. She joined McCarthy in 2005 as controller for the builder’s Southwest Region and was promoted to VP of finance in 2016 and SVP of finance in 2018. She assumed the EVP of finance position in 2019.
Ana Schrank was named CFO at Truepill, a digital health platform. Schrank will serve as Truepill’s first CFO and report directly to CEO Sid Viswanathan. Schrank joins Truepill after serving as CFO at Collective Health. She previously spent 23 years at McKesson Corporation, where she served in positions such as CFO of McKesson Connected Care and Analytics, chief audit executive, and VP of investor relations.
Mark Spelker was named CFO at Digital Prime Technologies, a brokerage for financial institutions entering the crypto and digital asset space. Spelker has spent his career in the areas of financial reporting, SEC compliance, and financing activities. Previously, he was the EVP and CFO of Innodata Inc. Prior to Innodata, Spelker was an audit partner and national director of SEC Services at CohnReznick LLP for 20 years.
“We’re not trying to copy someone else. We’re not trying to be a mini-Walmart."
—Sam’s Club CEO Kathryn McLay says the warehouse-club chain is finding a niche, and forming a clear identity separate from Walmart, as told to Fortune.
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