The CFO Sustainability Compass: guiding through regulation and transformation
Companies must transform their business models to be sustainable and future-oriented while navigating the various legal requirements and regulations. The CFO will play a pivotal role in this transformation. The CFO Sustainability Compass assists decision-making by focusing on key areas of responsibility, especially finance, strategy, and growth.
by Anna Kremer
Transforming businesses and dealing with global risks are key challenges for each company. This aspect is also substantiated by WEF Global Risks Report 2025, which presents the findings of the Global Risks Perception Survey 2024 – 2025 (GRPS) and analyses global risks through three timeframes to support decision-makers in balancing current crises and longer-term priorities. Environmental risks are among the top three risks as e.g. extreme weather events, biodiversity loss and natural resource shortage.
The CFO Sustainability Compass has been developed to help CFOs navigate the strategic and regulatory sustainability requirements affecting their companies. While recent regulatory developments, such as the EU Omnibus announcement, suggest a simplification and potentially less complex implementation than previously anticipated, the emphasis on strategy, risk management, and leveraging synergies across the CFO’s core responsibilities is likely to become even more critical in light of the conclusions of the Global Risks Report.
Finance, strategy and growth are key areas for CFOs that are essential for driving transformation
The Compass is structured around two key clusters of recommendations: “Finance, Strategy, and Growth” and “Reporting and Communication”. The first cluster outlines essential recommendations and actions that might serve as the foundation for a successful business transformation. The finance department plays a crucial role in integrating sustainability into corporate strategies, scenario planning, and transition initiatives. Sustainability factors have become central to corporate strategy, influencing investment decisions, financial reporting, and risk management. Effectively leveraging synergies between risk assessment, transition planning, and investment evaluation is essential and should not be underestimated.
The transition to a sustainable economy is a complex process that requires significant capital and liquidity. As CFOs are responsible for ensuring financial readiness through capital allocation, funding strategies, and risk management, it makes sense to drive business transformation decisions and actions.
Beyond regulations: addressing global risks with a strategic approach
In the last two years, the pressure to adopt sustainability has largely been driven by complex regulations and extensive data requirements. As a result, the core objective of transforming into a truly sustainable business model has, at times, been overshadowed. However, the Global Risks Report clearly highlights the urgency of assessing companies’ individual economic, social, and governance challenges. CFOs should drive the transformation by using synergies from the areas of their key responsibilities and integrating risk assessments into strategic planning, decision-making and financing.
The CFO Sustainability Compass – what’s in
The Compass identifies the key sustainability drivers and presents nine overarching recommendations for CFOs: in addition to the “Finance, Strategy and Growth” cluster, the CFO Sustainability Compass provides practical recommendations on the topic of “Reporting and Communication”. These recommendations emphasize the significance of sustainability reporting for senior management and CFOs. The Compass concludes with an appendix that provides insights into the main ESG disclosure regulations in Switzerland and Germany. A second appendix contains a list of leading ESG rating agencies including some German and Swiss players.
Further Information
Anna Kremer
is Senior Advisor at the Center for Corporate Reporting.